Silver (XA/USD) is seen extending its retracement slide from the highest level since February 2012 touched earlier this week and weakened for the third straight day on Friday (6/20). The downward trajectory dragged the white metal to its lowest level in over one week, around the $35.65 area during the Asian session.

From a technical perspective, XAG/USD's failure to extend this week's up-move beyond the $37.00 mark and a subsequent decline below the 23.6% Fibonacci retracement level of the May-June rally favors bearish traders. Moreover, oscillators on the 4-hourly chart have been gaining negative traction and support the case for a further depreciating move. That said, it would still be prudent to wait for some follow-through selling below mid-$35.00s, or the 100-period Simple Moving Average (SMA) on the 4-hourly chart, before positioning for deeper losses.

XAG/USD could then accelerate the corrective slide towards the 38.2% Fibo. level, around the $35.15 region, en-route the $35.00 psychological mark. The downward trajectory could extend further towards the $34.75 intermediate support before the commodity eventually drops to the $34.45 area or the 50% retracement level. The latter should act as a key pivotal point, which if broken decisively will suggest that the white metal has topped out and pave the way for some meaningful depreciating move in the near-term.

On the flip side, any recovery attempt back above the $36.00 level, coinciding with the 23.6% Fibo. level, could attract fresh sellers and remain capped near the $36.40-$36.50 supply zone. However, a sustained strength beyond the said barrier could shift the bias back in favour of bullish traders and lift XAG/USD back towards the $37.00 round figure en-route multi-year highs, around the $37.30-$37.35 area touched on Wednesday. (alg)

Source: FXstreet