- Silver lacked firm direction and remained confined in a range around $ 25.00.
- The setup favors bullish traders and supports the prospects for a further appreciation move.
- Sustained weakness below trend channel support is needed to nullify the positive bias.
At payment It struggled to capitalize on the positive move the day before and balanced between tepid gains / minor losses heading into the American session. The white metal was last seen trading sideways around the key psychological $ 25.00 level.
Looking at the broader technical picture, the recent strong recovery from the annual low hit in September has been along an ascending channel. This, coupled with last week’s advance, the 100-day / 38.2% Fibonacci SMA of the confluence barrier favors bullish traders.
The positive bias is reinforced by the appearance of new buying on Wednesday and bullish oscillators on the daily chart, which are still far from being in overbought territory. The setup supports the prospects for a further short-term appreciation move.
That said, the metal’s inability to find acceptance above the 50% Fibonacci level of the drop from $ 28.75 to $ 21.42 warrants caution. However, the stage looks set for a move towards the next relevant hurdle test near the $ 25.55-60 zone.
Some subsequent purchases have the potential to lift XAG / USD towards the 61.8% Fibonacci level, around the round $ 26.00 level. This matches the upper limit of the upstream channel mentioned and should limit any additional gain.
On the other hand, any pullback could still be seen as a buying opportunity and remain capped near the $ 24.50 resistance breakout point. This is followed by the confluence of $ 24.10- 24.00 (100 DMA and the 38.2% Fibonacci level, before the trend channel support near the $ 23.85-80 region.
A convincing break below the latter will negate the constructive outlook, rather than shift the bias in favor of bearish traders and lead to aggressive technical selling. The XAG / USD could accelerate the decline towards $ 23.00, or 23.6% of the Fibonacci level.
XAG daily chart
Technical levels
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