- Silver attracts buyers for a third consecutive day and hits a new weekly high on Wednesday.
- Lack of follow-through buying and mixed technical oscillators advise caution for bulls.
- Sustained strength above the $29.00 level is needed to support prospects for further gains.
Silver (XAG/USD) is trading with a mild positive bias for the third consecutive day on Wednesday, although it lacks bullish conviction and currently hovers around the $28.45 region, just below the weekly high reached during the Asian session.
From a technical perspective, the white metal is holding above the 23.6% Fibonacci retracement level of the August-September drop and looking to build momentum beyond the 200-period simple moving average (SMA) on the 4-hour chart. As oscillators on the said chart have started gaining positive traction, they are yet to confirm a bullish bias on the daily chart. Therefore, the XAG/USD is more likely to face stiff resistance near the confluence of $28.95-$29.00 – which comprises the 50% Fibonacci level and the 100-period SMA on the 4-hour chart.
A sustained strength beyond this, however, will be seen as a fresh trigger for the bullish traders and will pave the way for a significant appreciating move. The subsequent move higher has the potential to lift the XAG/USD beyond the 61.8% Fibonacci resistance level near the $29.25 region, towards the $29.65 area, or the 78.6% Fibonacci level. The momentum could further extend towards reclaiming the psychological $30.00 level, above which the bulls could aim to challenge the August monthly high, around the $30.20 zone.
On the other hand, the $28.25 region, or the 23.6% Fibonacci level is likely to protect the immediate downside ahead of the $28.00 level. A convincing break below it could make the XAG/USD vulnerable to weaken further below the $27.70-$27.65 zone, towards the next relevant support near the $27.20 region en route towards the $27.00 level. Some follow-through selling could then expose the August monthly low, around the $26.40-$26.35 area, before the white metal eventually drops to the $26.00 round figure.
Silver 4 hour chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
