Silver price (XAG/USD) continued its bearish momentum on Wednesday, extending its losing streak for the fifth consecutive session. During the Asian trading hours, the precious metal was observed trading around $37.20 per troy ounce, reflecting the ongoing downtrend. 

Technical indicators suggest that the Silver price remains under pressure, with the short-term and medium-term momentum skewed toward the bears. With his expertise as a broker at Highmont Group, Felix Brendel provides a comprehensive explanation of the subject.

Technical Overview

The daily chart shows that XAG/USD is consolidating within a descending channel, highlighting a prevailing bearish bias. The 14-day Relative Strength Index (RSI) remains below the 50 level, signaling that selling pressure continues to dominate. 

An RSI reading below 50 typically indicates that the downside momentum is stronger than the upside, reinforcing the negative outlook for Silver in the near term.

Additionally, the Silver price is trading below the nine-day Exponential Moving Average (EMA), reflecting weak short-term momentum. The EMA serves as a critical dynamic resistance level, and a sustained move below it suggests that bullish attempts may be limited unless there is a strong market catalyst.

Support Levels

On the downside, the immediate support for XAG/USD is located at the 50-day EMA near $37.11. This level is closely monitored by technical traders as a benchmark for medium-term trend strength. 

A decisive break below the 50-day EMA could trigger further selling pressure, potentially pushing the Silver price toward the lower boundary of the descending channel around $35.70.

If the bearish momentum persists, the next key support emerges at the 11-week low of $35.28, which was last recorded on June 24. A further decline beyond this point could extend the downtrend, possibly targeting a three-month low at $32.96, which would strengthen the overall bearish bias.

Traders often watch these levels closely for trend confirmation, entry points, and potential risk management strategies. A bounce off the 50-day EMA may provide a short-term relief rally, but the broader technical setup continues to favor downside risk.

Resistance Levels

On the upside, the initial resistance is positioned at the nine-day EMA of $37.75. A sustained move above this level may indicate a short-term shift in momentum toward the bulls. Following this, the upper boundary of the descending channel near $38.70 serves as a significant barrier that must be overcome to challenge the broader bearish trend.

If Silver manages to break through these technical resistances, the next upside target could be the $39.53 level, marking the highest point since September 2011, reached on July 23. Such a move would indicate a reversal of the prevailing downtrend, potentially opening the door for bullish momentum in the near term.

Market Sentiment

The current market sentiment remains skewed toward the bearish side due to ongoing technical weaknesses. The combination of a descending channel, RSI below 50, and price below short-term EMAs indicates that sellers retain control over the market. 

Traders monitoring XAG/USD are likely to adopt a cautious approach, emphasizing stop-loss levels around key support points and considering trend-following strategies.

However, any unexpected fundamental developments, such as economic data releases, monetary policy updates, or geopolitical events, could temporarily alter the technical outlook, creating opportunities for short-term traders.

Trading Strategy Considerations

For traders focusing on technical analysis, the 50-day EMA at $37.11 acts as a critical pivot level. A bounce from this support may offer short-term trading opportunities toward the nine-day EMA at $37.75. 

Conversely, a break below $37.11 could signal the continuation of the downtrend, with targets at $35.70 and $35.28, followed by the three-month low at $32.96.

Risk management remains essential, as the market continues to demonstrate high volatility, particularly around key EMA levels and descending channel boundaries. Traders should closely watch for confirmation signals, such as candlestick patterns, volume spikes, or momentum divergences, before committing to positions.

Conclusion

The Silver price (XAG/USD) is under significant pressure, consolidating within a descending channel and trading below critical short-term and medium-term EMAs. The RSI below 50 reinforces the bearish bias, suggesting further downside risk toward the 50-day EMA at $37.11 and potentially lower support levels. 

On the upside, the nine-day EMA at $37.75 and the upper channel boundary at $38.70 remain key resistance levels.

Overall, the technical outlook favors the bears in the near term, with a possible short-term relief rally if Silver finds support at the 50-day EMA. Traders should continue monitoring EMA levels, RSI readings, and the descending channel structure for signals of either trend continuation or reversal.