- Silver attracted some buying down near the $ 24.00 region on the first day of a new week.
- Mixed oscillators on hourly / daily charts warrant caution before placing new bullish bets.
- A sustained move above $ 25.55-60 is needed to confirm a short-term positive bias.
Silver has managed to recoup its intraday losses to the $ 24.60 region and has now moved to the upper end of its daily trading range. The bulls are now awaiting a sustained move past the key psychological mark of $ 25.00 before positioning for an extension of last week’s bounce from yearly lows around the $ 23.80-75 region.
The white metal was last seen trading just above a confluence region comprising the 200 hourly SMA and the 38.2% Fibonacci level from the recent $ 26.64-$ 23.78 drop. This is followed by the $ 25.25-30 bid zone, which coincides with the 50% Fibonacci level and should now act as a key point for short-term traders.
A sustained move further will set the stage for further gains and push the XAG / USD further towards the 61.8% Fibonacci level of resistance near the $ 25.55-60 region. Some subsequent purchases will be seen as a new trigger for bull traders and will pave the way for a move back towards the $ 26.00 recovery.
Meanwhile, the technical indicators on the hourly charts have been gaining positive traction and add credibility to the constructive outlook. That being said, the oscillators on the daily chart, although they have rebounded from the negative zone, have yet to confirm a bullish bias and require some caution before positioning for further gains.
Therefore, it will be prudent to wait for a strong follow-up buy beyond the $ 25.25-30 resistance before confirming that XAG / USD has bottomed out in the near term.
On the other hand, the daily swing lows, around the $ 24.60 zone now seem to protect the immediate drop before the 23.6% Fibonacci level, around the $ 24.40 area. Failure to defend the aforementioned support levels will negate any short-term positive bias and lead to some aggressive selling around the XAG / USD.
The commodity could become vulnerable to fall back below $ 24.00 and retest the multi-month lows around the $ 23.80-75 zone. The downward trajectory could extend further towards the intermediate support levels of $ 23.25, $ 23.00 before the XAG / USD falls to the December 2020 lows, around the $ 22.60-55 zone.
1 hour chart
Technical levels
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