- The price of silver gains traction during the first half of trading action on Thursday.
- The bulls are now expecting a sustained breakout through the one-week trading range.
- Sustained weakness below the $ 25.85-80 support will negate the positive bias.
The price of silver has built on the good bounce the day before from the $ 25.85-80 support area and gained some traction on Thursday. Momentum has driven XAG / USD to week-long highs around $ 26.00 during the first half of the day’s trading action.
The bulls, however, have struggled to capitalize on the move, and the white metal has so far held below the strong horizontal resistance at $ 26.60-65. The aforementioned barrier also marks the upper limit of a one-week trading range and should now act as a key fundamental point.
Meanwhile, the technical indicators on the daily chart have maintained their bullish bias and have been climbing higher on the hourly charts. The setup supports prospects for an eventual break to the upside and an extension of the recent strong recovery from annual lows.
With that said, it will still be prudent to wait for a sustained breakout above the trading range before positioning for any further bullish movement. The subsequent positive move should help the XAG / USD to point towards recovering the round level of $ 27.00.
The up move could extend to the $ 27.40 region, a resistance marked by an uptrend line that has been running since late March. Some subsequent purchases will negate any negative bias and be seen as a new trigger for the bulls.
On the other hand, the $ 26.00 level, followed by the trading range support near $ 25.85-80 now appears to defend the immediate decline. This latter level also coincides with the 100-period EMA on the 4-hour chart, which if broken could trigger aggressive technical selling.
The XAG / USD could become vulnerable and fall to the key psychological level of $ 25.00 on its way to the horizontal support of $ 24.65-60. The bears could try to challenge the $ 24.00 level before visiting the yearly lows, around the $ 23.80-75 region, touched on March 31.
Silver 4 hour chart
Silver technical levels
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