- Silver is witnessing a trend reversal from the confluence resistance at $ 25.60, at two-week highs.
- A sustained break below the ascending channel should pave the way for a further decline.
- The bulls could now wait for a move above the mentioned barrier before opening new positions.
Silver has seen some selling on the last trading day of the week and has returned a significant portion of the previous day’s gains to highs of more than two weeks. At the time of writing, the XAG / USD is trading around the $ 25.20 region, shedding 0.85% on the day.
The recent rebound from the yearly lows hit on March 31 has stopped near the confluence region of $ 25.60. The aforementioned barrier comprises the 61.8% Fibonacci retracement of the decline from $ 26.64 to $ 23.78 and the upper end of a short-term rising channel. This region should now act as a fundamental point for short-term investors and help determine the next directional move for the XAG / USD.
The white metal, so far, has shown some resistance below the 50% Fibonacci level and has managed to stay above the psychological level of $ 25.00. This level coincides with the support of the trend channel, which if it breaks decisively could trigger some technical selling. This, in turn, will set the stage for a dip towards the 38.2% Fibonacci test, around the $ 24.85 region.
Meanwhile, the technical indicators on the 1 hour chart have started to move back into negative territory. Also, the oscillators on the daily chart have not yet recovered from the bearish zone. The setup supports the prospects for an eventual break to the downside and the resumption of the previous downward movement seen over the past two months or so.
The next relevant bearish target is in the region of $ 24.45, the 23.6% Fibonacci. Some subsequent selling will negate any short-term positive bias and make XAG / USD vulnerable to accelerate the slide towards the round $ 24.00 level. Momentum could extend further and drag the white metal towards yearly lows around the $ 23.80-75 region.
On the other hand, the $ 25.60 region could continue to act as a strong immediate resistance and limit the rise of the XAG / USD. With that said, a sustained move above this level could spark a new short-hedging move and help the metal point towards recovering the $ 26.00 level. Any subsequent move to the upside would allow the bulls to challenge the $ 26.40-50 resistance zone.
Silver 1 hour chart
Silver technical levels
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