- Silver continues its struggle to break out of the 100-period EMA on the 4-hour chart.
- Mixed oscillators on the 4-hour and daily charts warrant some caution before opening directional positions.
Silver has struggled to capitalize on the positive move the day before and has moved lower at the start of the European session on Tuesday, although it lacks solid follow-on selling. At the time of writing, the white metal is holding above the $ 26.00 level.
From a technical perspective, the XAG / USD has repeatedly failed to break the 100-period EMA on the 4-hour chart. The mentioned hurdle is near the $ 26.25-30 region, which should now act as a key fundamental point and help determine near-term direction.
Meanwhile, the technical indicators on the said chart have only just started to move into the positive territory, but they have yet to confirm a bullish bias on the daily chart. This, in turn, justifies some caution for aggressive investors before positioning themselves in a firm direction.
Looking at a slightly broader picture, the recent bounce from the multi-week lows around the $ 24.85-80 region has occurred along an upward sloping channel. Given the recent sharp pullback, the channel appeared to constitute the formation of a bearish flag pattern.
That said, a sustained force above the $ 26.25-30 region could push XAG / USD towards trend channel resistance, around the $ 26.85-90 region. This region coincides with the monthly highs, which if exceeded will be seen as a new trigger for the bulls.
On the other hand, any significant drop below the $ 26.00 level could continue to find decent support near the lower limit of the channel, currently near the $ 25.85 region. A sustained break below this level will confirm a bearish breakout and pave the way for a further decline.
The XAG / USD could accelerate the slide towards the key psychological level of $ 25.00. The bearish momentum could extend and drag the white metal to the very important 200-day SMA, around the $ 24.00 area, with some intermediate support near the $ 25.55-50 region.
Silver 4 hour chart
Silver technical levels
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