The pair XAG/USD started this week with the significant decline, which was suspended due to the US negative data on the number of orders of durable goods. At the moment the pair is traded in the downtrend near the level of 16.78, which coincides with Fibonacci retracement of 61.8%. Breakdown of this level in either direction will trigger either upward movement in price to the level of 16.95 (Fibonacci retracement of 50.0%, middle line of Bollinger bands, upper limit of the downward channel) and 17.14 (Fibonacci retracement of 38.2%) or the decline to 16.65, 16.45 and 16.20.
Technical indicators give mixed signals. Bollinger bands are directed downwards. MACD histogram is in the negative zone and its volumes are increasing. Stochastic lines are directed upwards, giving a buy signal.
On the daily chart the level of 16.78, (from which the price fails to rebound), coincides with the middle line of Bollinger bands, being a strong resistance level. The other strong resistance level is 16.95, which coincides with Fibonacci lines on the both charts: H4 and D1 (50.0% and 38.2% respectively).
On the daily chart technical indicators show that the decline will continue. Bollinger bands are going to start horizontal movement. The price chart has broken down the middle line, but has not yet rebounded from it. MACD histogram is in the positive zone; it has crossed the signal line from top to bottom, forming a sell signal. Stochastic lines are directed downwards.
Support and resistance
Support levels: 16.65, 16.45, 16.20 and 15.72.
Resistance levels: 16.78, 16.95, 17.14 and 17.35.
Judging by technical indicators the key level is 16.78. If this level is broken down, short positions can be opened with the targets of 16.45 and 16.20. Note. However, that the preferable entry point is 16.65. If the price consolidates above the level of 16.78, long positions with he target of 16.95 can be opened.