The global markets have been hit hard recently by economic uncertainties and many other factors. Silver was also not spared as the US dollar regained some of its strength. The latest data shows that silver price (XAG/USD) has paused its six-day losing streak after it recorded 9-week lows of $21.70 in early trades.
Bears are resting after the continuous slump caused by the relentless strength in the USD across its main competitors. A flight to safety as fears grow over COVID-19 resurgence and its implications on the global economy boosted the haven demand for the greenback.
Based on a short-term technical view, silver is trying a minor recovery after meeting strong demand around $21.70. This region represents the falling trendline support as the spot wavers in a possible falling channel formation. On the upside, the bulls seem to be ready to reclaim the crucial 21-daily Simple Moving Average (DMA), at the moment pegged at $23.02, for the recovery to gain momentum.
Taking a look at the hourly Relative Strength Index (RSI), charts show that it has rebounded from within the oversold territory and it points higher at 37.20. That now adds some credence to the pullback.
A strong break above the 21-HMA barrier might expose the falling trendline resistance at $23.60. After that, the next upside target has formed at the downward-sloping 50-HMA of $23.78.
On the other hand, a rejection at the 21-HMA might strengthen the bearish bias. That occurrence will call for a retest of the falling trendline. A breach of this level might trigger a fresh sell-off heading towards the $20 level.
Currently, silver is trading below all the major moving averages on the hourly charts. Thus, the bulls face a major challenge on the road to recovery.