Silver Price Forecast: XAG/USD flat lines around $37.00; bearish potential seems intact

• Silver kicks off the new week on a softer note amid the emergence of some USD buying.
• The technical setup favors bearish traders and backs the case for a further depreciation.
• Any attempted recovery beyond the 200-period SMA on the H4 is likely to get sold into.

Silver (XAG/USD) struggles to capitalize on Friday's modest recovery gains and oscillates in a range at the start of a new week as softer US NFP-inspired US Dollar (USD) selling now seems to have abated. The white metal currently trades around the $37.00 mark and remains within striking distance of a four-week low touched last Thursday.

From a technical perspective, this week's breakdown below a nearly two-month-old ascending channel support, which coincided with the 200-period Simple Moving Average (SMA) on the 4-hour chart, was seen as a key trigger for the XAG/USD bears. This, along with negative oscillators on daily/4-hour charts, suggests that the path of least resistance for the commodity remains to the downside.

Hence, any subsequent recovery is more likely to confront a stiff barrier near the $37.35 region (200-period SMA on the 4-hour chart). This is followed by the ascending channel support breakpoint, around the $37.60 region, which should act as a pivotal point, which, if cleared, might trigger a short-covering rally and allow the XAG/USD to climb to the $38.00 mark en route to the $38.30-$38.35 region.

On the flip side, the multi-week low, around the $36.20 area, now seems to protect the immediate downside ahead of the $36.00 round figure. Some follow-through selling will reaffirm the negative bias and drag the XAG/USD to the next relevant support near the $35.50 zone. The downward trajectory could extend further towards challenging the $35.00 psychological mark.

XAG/USD 4-hour chart