- Silver is moving higher for the second day in a row and away from weekly lows.
- The technical setup appears tilted in favor of the bulls and supports the prospects for additional earnings.
- Sustained weakness below the $ 26.70 confluence support will negate the constructive outlook.
Silver has recovered from an intraday slide to the $ 26.80 region and is now looking to take advantage of the previous day’s rally from week-long lows. The white metal has turned positive for the second day in a row and has spiked to two-day highs around the $ 27.30 region during the European session on Friday.
Looking at the technical picture, the XAG / USD has been trending up within an upward sloping channel extending from the yearly lows, around the $ 23.80-75 region touched on March 31st. The recent pullback from the $ 27.65-70 region has stopped near the lower boundary of the mentioned channel.
The appearance of some buying near the trend channel support and the subsequent positive movement favors the bulls. That said, the repeated failures near the 61.8% Fib retracement of the dip from $ 30.07 to $ 23.78 warrant some caution before positioning for further strong gains.
From current levels, any further positive moves could continue to face stiff resistance near the $ 27.65-70 region. A convincing breakout should push XAG / USD above the $ 28.00 level, to challenge the trending channel hurdle near the $ 28.25-30 zone.
On the other hand, weakness below the $ 27.00 level is likely to be limited by the trend channel support, around the $ 26.80 region. This level coincides with the 100-period SMA on the 4-hour chart. If it breaks decisively it will change the short-term bias in favor of the bears.
The next relevant support is near the $ 26.15-10 (Fibonacci 38.2%) area, below which the XAG / USD could become vulnerable to break below the $ 26.00 level. This would eventually expose the $ 25.00 psychological level, with some intermediate support near the $ 25.30-25 (Fibonacci 23.6%) zone.
Silver 4 hour chart
Silver technical levels
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