• Silver meets with some supply on Wednesday and snaps a three-day winning streak.
• The setup favours bearish traders and supports prospects for further intraday losses.
• A sustained strength beyond the $23.00 mark is needed to negate the bearish outlook.

Silver struggles to capitalize on its positive move witnessed over the past three days and comes under some selling pressure during the early European session on Wednesday. The white metal drops to a fresh daily low in the last hour and currently trades around the $22.80-$22.85 region, down nearly 0.80% for the day.

The downfall could be attributed to some technical selling against the backdrop of the recent repeated failures to find acceptance above the $23.00 mark and rejection near the 38.2% Fibonacci retracement level of the downfall from the June swing high. Meanwhile, technical indicators on the daily chart are holding in the bearish territory and have again started gaining negative traction on hourly charts. This, in turn, supports prospects for a further intraday depreciating move for the XAG/USD.

That said, the recent breakout through the $22.65-$22.70 confluence - comprising the 200-hour Simple Moving Average (SMA) and the 23.6% Fibo. level - favours bullish traders. Hence, any subsequent slide is more likely to find some support near the said resistance breakpoint. A convincing break below, however, could be seen as a fresh trigger for bearish traders and make the XAG/USD vulnerable to slide back towards challenging the multi-month low, around the $22.10 region touched in June.

Some follow-through selling below the $22.00 mark should pave the way for deeper losses towards the $21.70-$21.65 zone en route to the $21.25 support before the XAG/USD eventually drops to the $21.00 round-figure mark.

On the flip side, the $23.00-$23.10 region, or the 38.2% Fibo. level, might continue to act as an immediate barrier. A sustained strength beyond should allow the XAU/USD to surpass 50% Fibo. level around the $23.30 zone and climb further towards the $23.60 region, or the 61.8% Fibo. level. The upward trajectory could get extended towards the $24.00 mark en route to the $24.25 resistance and the $24.45-$24.50 supply zone, or the June monthly swing high.

Silver 1-hour chart

Key levels to watch