XAG / USD clings to gains near daily highs around $ 25.30-35

• Silver moved higher on Monday and is closing in on the resistance of the three-day range again.
• Price action within a range constitutes the formation of a bearish continuation rectangle pattern.
• A sustained move above the $ 26.00 level is needed to negate the bearish outlook for XAG / USD.

Silver maintains its buying tone during the European session on Monday and remains near the upper end of its daily trading range around the $ 25.30-35 region.

However, XAG / USD remains within a three-day-old trading range, which constitutes the formation of a rectangle on the 1-hour chart. Given last week’s sustained break below the $ 25.70-65 confluence soprote, this could still be classified as a bearish continuation pattern and supports the prospects for further losses.

The negative outlook is reinforced by the fact that the technical indicators on the daily chart, although they have recovered from lower levels, are still in bearish territory. Therefore, any subsequent move to the upside could still be viewed as a selling opportunity and risks ending near the breakout point of support at $ 25.65-70.

This last level comprised the very important 200-day SMA and the 61.8% Fibonacci move from $ 23.78 to $ 28.75, which should now act as a crucial point for short-term investors. This is followed by the $ 26.00 level, above which the recovery could extend towards the next relevant barrier near the $ 26.40-50 resistance zone.

On the other hand, the key psychological level of $ 25.00 is likely to defend the immediate fall before targeting the monthly lows, around the region of $ 24.75 touched last week. A convincing breakout of this region will reaffirm the bearish bias and drag XAG / USD towards the $ 24.00 level on its way to yearly lows, around the $ 23.80-75 region.

Silver 1 hour chart

Silver technical levels