Silver prices fell on Friday from a three-week high of $28.74, as a result of high US Treasury yields and a stronger US Dollar. The metal was trading at around $28.19 at the time of writing, with momentum favoring bulls in the medium term. However, the formation of a ‘shooting star’ pattern indicates a potential retracement in the short term.
Technically, Silver remains in an uptrend, supported by the Relative Strength Index (RSI) readings between 60-70. Despite this, the downward slope of the RSI suggests a bearish bias in the short term, with key support levels at $28.00 and $27.70. A break below these levels could lead to further downside towards the 38.20% Fib retracement level.
On the flip side, a bullish scenario could unfold if buyers manage to push prices above the current week high of $28.76 and the $29.00 mark. Breaking through these resistance levels could pave the way for a challenge of the year-to-date high at $29.79. Overall, the technical outlook for XAG/USD remains uncertain, with the potential for both upward and downward movements in the near term.
In conclusion, the price of Silver retreated from a recent high due to external factors such as US Treasury yields and the strength of the US Dollar. Despite this, momentum still favors bulls in the medium term, although a ‘shooting star’ pattern suggests a potential retracement in the short term. Traders should keep a close eye on key support and resistance levels to gauge the direction of Silver prices in the coming days.
