Silver Price Forecasts: XAG/USD looks for direction above key support at $65.50 area

Silver (XAG/USD) remains practically flat on Tuesday, holding most of Friday’s losses and trading at $66.60 at the time of writing, with price action contained within the previous day’s range. The broader bullish trend from late July lows remains in play, but failure to breach Monday’s high, at $67.47, might increase pressure on a key support area around $65.50.

Precious metals are looking for direction in a calm trading session on Tuesday, with US Dollar volatility subdued. The impulse from the US Federal Reserve Chairman Kevin Warsh’s hawkish comments on Friday has worn off, and investors await key employment data due later this week for a better assessment of the outcome of September’s monetary policy decision.

Technical Analysis: Holding above the ascending trendline support

XAG/USD trades at $66.47, following a sharp reversal from the $71.00 area last week. The near-term structure remains positive, but Friday's bearish engulfing candle is an important bearish sign, and a clear break of the $65.50 area where trendline support crosses Monday's low would confirm a deeper reversal.

Momentum indicators in the daily chart offer a mixed picture, with the Relative Strength Index (14) mildly positive above the 50 level, whereas the Moving Average Convergence Divergence (MACD) has turned negative, reinforcing the idea of a waning bullish phase and increasing risk of a corrective pullback.

Bulls should break Monday's high at $67.47 to shift the focus again towards the resistance area between the mid-June highs, at $71.75 and the 200-day Simple Moving Average (SMA) at $72.64. On the downside, below the mentioned $65.50 area, bears might be attracted by the August 19 low, at the $62.20 area.