Silver Price Looks Set For Further Declines

• Silver price after remaining in an uptrend for a while against the US dollar found sellers and moved down.
• There was a crucial trend line formed on the XAGUSD 4-hours chart, which was broken during the downside move.
• Today, the US Consumer Price Index economic release may ignite swing moves in Silver price moving ahead.

US Economic Releases

The US saw a couple of crucial releases lately, including the retail sales report. The market was expecting a minor decline in the retail sales in August 2016.

However, the result was not as the market expected. There was a decrease of 0.3% in the total receipts of retail stores. When we have a look at the Retail Sales ex Autos, then again the outcome was disappointing, as there was a decline of 0.1%.

The report further added that “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $456.3 billion, a decrease of 0.3 percent (±0.5%)* from the previous month, and 1.9 percent (±0.7%) above August 2015”.

The result was disappointing, but it failed to help Silver price in recovering, as XAGUSD remained under a bearish pressure.

Silver Price Technical Analysis

Silver price enjoyed a decent upside move against the US dollar this past week. It traded above the $26 level and posted a high of $26.21 where it found sellers.

The price started to move down, and during the downside, it broke a couple of important support levels. First, the 38.2% Fib retracement level of the last wave from the $24.23 low to $26.221 high was broken. Second, the 200 simple moving average on the 4-hours chart was cleared. Lastly, there was a crucial trend line formed on the XAGUSD 4-hours chart, which was also broken.

So, we can say that the price broke a major support zone, and may decline further in the near term. Currently, the Silver sellers are attempting to close the price below the 100 simple moving average on the 4-hours chart. If they succeed, then more losses are likely. If the price corrects higher, then the broken trend line along with the 50% Fib retracement level of the last drop from the $26.21 high to $24.93 low may act as a resistance.