- Silver appears to be struggling to capitalize on its positive move above the $ 26.00 level.
- A short-term rising trend channel constitutes the formation of a bearish flag.
- Bullish technical indicators warrant caution before opening aggressive bearish positions.
Silver has regained positive traction on Wednesday and has slowly risen near the upper end of its weekly trading range. At time of writing, the white metal is trading around the $ 25.87 level, up 0.08% on the day.
Looking at the technical picture, the recent bounce from the $ 23.80-75 region, at yearly lows, has occurred along an upward sloping channel. Given the strong pullback from the key psychological level of $ 30.00, the aforementioned channel constitutes the formation of a bearish flag chart pattern.
Repeated failures near the trend channel resistance, which coincides with the $ 26.30-35 resistance zone, adds credibility to the bearish setup. This, in turn, should now act as a key point for short-term investors and help determine the next directional move for XAG / USD.
Meanwhile, the technical indicators on the hourly / daily charts remain in positive territory, but have been struggling to gain significant traction. However, it will still be prudent to wait for a sustained break below the channel support before opening new bearish positions.
The lower limit of the channel is currently near the $ 25.45 region and now coincides with the 200-period SMA on the 4-hour chart. Sustained weakness below this region will confirm a bearish breakout and set the stage for an accelerated decline towards the key psychological level of $ 25.00.
Some subsequent selling below the $ 24.75-70 support would make the XAG / USD vulnerable to extend the slide and challenge the $ 24.00 level. The downward trajectory could extend further towards the yearly lows, around the $ 23.80-75 region, on its way to the $ 23.20 support zone.
On the other hand, a convincing break above the strong $ 26.30-35 barrier will negate any short-term bearish bias and trigger an aggressive short-hedging move. XAG / USD could accelerate the move to regain the $ 27.00 level before launching towards the $ 27.65-70 area.
Silver 4 hour chart
Silver technical levels