- Silver captures new purchases near the $ 24.50 resistance breakout point, now turned into support.
- The setup appears tilted in favor of the bulls and supports the prospects for further gains.
- A sustained break below the $ 24.00 level is needed to negate the positive outlook.
Silver has captured new purchases near $ 24.50 on the first day of a new week and has again approached the key psychological level of $ 25.00 during the early part of the European session.
From a technical perspective, the recent pullback from a high of more than three months has been along a bearish channel. Against the backdrop of a strong upward movement from the 14-month low hit in September, the aforementioned channel constitutes the formation of a bullish flag pattern on short-term charts.
The positive outlook is reinforced by the fact that the technical indicators on the daily chart, while losing momentum, are still comfortably in bullish territory. In addition to this, the emergence of lower level buying near a strong horizontal resistance break point favors the bulls.
Silver 4 hour chart
This, together with the formation of an ascending channel on the daily chart, supports the prospects for the resumption of the previous uptrend seen in the last two months. A few supplemental purchases will firm up the constructive setup and pave the way for additional earnings.
Silver daily chart
XAG / USD could pick up the pace for a test of the $ 25.35-40 region, or the highest level since August 5 set earlier this month. Momentum could push the white metal past the intermediate resistance at $ 25.60 and allow the bulls to rebound to the $ 26.00 level.
On the other hand, the resistance break point of the $ 24.50 region, now turned into support, should continue to defend the immediate decline. This level is followed by the $ 24.10-24.00 confluence, which comprises the 100-day SMA and the lower end of the ascending channel. In case of breaking below this region the positive bias will be negated.
Silver technical levels
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