Losses, avoiding the high point from the all-time high, break below $66 ... Beware of technical overbought signals

Current Situation: Silver(XAG/USD) is trading around $65.70~$65.75 on Thursday during the Asian session, rebounding after reaching the previous high. Daily technical indicators signal overbought conditions, with increasing profit-taking demand as traders lock in gains. However, the strong momentum confirmed by breaking below the $64.00 resistance zone remains valid, and there is still potential for buy-in at lower prices during the correction.

Spot silver prices experienced over a 1% decline amid selling pressure during Thursday’s Asian session. Nonetheless, given the proximity to the previous day’s high, the market predominantly views this as a technical correction following an excessive rally rather than a trend reversal.

Technical Indicators in Current Phase: Daily RSI Warning

The fundamental cause of this correction is technically clear. As the daily RSI enters overbought territory, profit-taking pressures naturally increase among traders who participated in the rapid ascent. Assets that have risen sharply typically go through a period of consolidation. Silver is following this cycle.

Current hourly technical indicators are as follows:

• 1-hour RSI: 59.95, indicating a neutral to bullish trend
• MACD: Histogram has fallen below zero, signaling cooling of short-term momentum
• MACD Line: Positioned below the signal line, suggesting potential short-term bearishness

Significance of Key Level $64.00 and 100-hour SMA

The breakout above the $64.00 level yesterday is not just a simple price event. It signifies that the short-term upward trend has gained technical legitimacy. More importantly, the $64.00 zone now coincides with the 100-hour SMA(short-term moving average), which has been established as the “first support after a breakout” among short-term traders.

Future Scenario Responses

If the Bullish Momentum Continues If the price maintains above the rising 100-hour SMA, the current correction is likely to be reinterpreted as a “buying opportunity at lower prices.” In this case, if the MACD turns positive again and RSI stays above the 50 level, the bullish trend is expected to strengthen further.

If the Bearish Momentum Sets In Conversely, if the price clearly breaks below the 100-hour SMA, a deeper short-term correction(deep correction) is likely to occur. Traders should exercise caution in this zone.

For now, the correction is predominantly seen as a normal phase within the bullish momentum. However, whether the 100-hour SMA can hold will be a key factor in determining the future direction.