- Silver caught some new offers on Wednesday and fell slightly closer to multi-week highs.
- The setup favors bullish traders and supports the prospects for additional short-term gains.
- A sustained break below the round 23.00 level is needed to negate the constructive outlook.
The XAG It attracted some buying in the dips on Wednesday and retraced slightly closer to the round $ 24.00 level during the mid-European session. This is closely followed by six-week highs around the $ 24.10-15 region touched on Tuesday and the 38.2% Fibonacci level of the $ 28.75-$ 21.42 drop.
Given the sustained move overnight past a downtrend line extending from the monthly swing highs in July, the short-term bias remains skewed in favor of bullish traders. The positive outlook is reinforced by bullish technical indicators, which are still far from being in the overbought zone.
This is due to the recent bullish breakout through an inverted head and shoulders neckline and supports the prospects for additional earnings. Therefore, a further strength beyond the $ 24.15-20 zone, towards the next relevant hurdle around the $ 24.75-80 region, remains a clear possibility.
The momentum could extend further and allow the XAG / USD to target to regain the key psychological level $ 25.00. The latter is approaching 50% of the Fibonacci level, which if decisively cleared will be seen as a new trigger for bullish traders and will pave the way for a further short-term appreciation move.
On the other hand, the break point of the downtrend line resistance, around the $ 23.60-55 region, now appears to protect the immediate downside ahead of the 23.6% Fibonacci level, around the 23.20- zone. $ 15. This is closely followed by the $ 23.00 level, which should act as a solid foundation for the XAG / USD.
A convincing break below will negate the positive short-term outlook, instead turning the bias in favor of bearish traders and prompting aggressive technical selling. Some follow-up weakness below the $ 22.75-70 zone will reaffirm the negative bias and make the XAG / USD vulnerable to further sliding.
XAU daily chart
Technical levels
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