XAG / USD looking to take advantage of intraday bounce from $ 25.80-75 support zone

  • The price of silver attracts some buying on Monday and rises above the $ 26.00 level again.
  • The recent price action now appears to constitute a rectangle pattern.
  • A sustained breakout of the trading range is needed to confirm short-term direction.

Silver has managed to defend the strong horizontal support at $ 25.80-75 and has regained positive traction on the first day of a new week. The white metal has maintained its buying tone during the first half of the European session, hovering around the $ 26.10-15 region.

Looking at the technical picture, the XAG / USD has been hovering within a tight trading range for the last two weeks or so. This constitutes the formation of a rectangle, which shows indecision about short-term direction and warrants caution by aggressive investors.

Meanwhile, the oscillators on the daily chart, while holding in bullish territory, have been struggling to gain significant traction. This makes it prudent to wait for a sustained breakout of the mentioned range before positioning for the next directional move.

From current levels, any subsequent move above the immediate obstacle at $ 26.25 could continue to face strong resistance near the $ 26.50-60 zone. A sustained force above this region will mark a bullish breakout and help the XAG / USD to point towards recovering the round $ 27.00 level.

On the other hand, the $ 25.80-75 region could continue to defend the immediate drop. Some subsequent selling will make the XAG / USD vulnerable to accelerate the slide towards the key psychological level of $ 25.00 on the way to the horizontal support of $ 24.65-60.

The bears could finally drag XAG / USD towards the $ 24.00 level. This is closely followed by yearly lows, around the $ 23.80-75 region touched on March 31, which if decisively broken will set the stage for a further short-term bearish move.

Silver 4 hour chart

The payment

Silver technical levels

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