- Silver saw some selling for the third day in a row on Tuesday.
- Recent price action within a range warrants caution for aggressive investors.
The price of silver (XAG / USD) has struggled to capitalize on the good rally the day before from the region of $ 27.45 and was met with new sales on Tuesday. The white metal maintains its selling tone until the beginning of the American session, trading around the $ 27.65 area with a 0.70% drop on the day.
From a technical perspective, the XAG / USD, so far, has managed to defend a support marked by the 200-period SMA on the 4-hour chart. This is followed by the lower bound of a nearly month-old trading range, around the $ 27.20 region, which should now act as a key turning point for short-term investors.
Meanwhile, the technical indicators on the daily chart, while losing positive momentum, have yet to confirm a bearish bias. This warrants some caution and makes it prudent to wait for a convincing break below range support before positioning for any further declines.
Some continuation selling below the $ 27.00 level will confirm a short-term bearish breakout and may trigger some aggressive technical selling. XAG / USD could accelerate the decline towards the horizontal resistance break point of $ 26.60, now turned into support, on its way to the round level of $ 26.00.
The downward move could extend to challenge the very important 200-day SMA, currently near the $ 25.75 region.
On the other hand, the $ 28.00 level now appears to have emerged as an immediate strong obstacle ahead of the $ 28.25-30 resistance zone. Sustained strength above this region has the potential to push XAG / USD towards the monthly highs, around the $ 28.75 region, en route to the next relevant resistance near the $ 29.00 level.
Silver 4 hour chart
Silver technical levels
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