- Silver received fresh bids on Wednesday, recouping a large chunk of overnight losses.
- The mixed technical setup warrants some caution before placing aggressive bullish bets.
- A sustained move above $26.00 will negate the bearish bias and open the way for more gains.
Silver regained positive traction on Wednesday, climbing back above the psychological $25.00 level during the first half of the European session. The uptrend allowed the white metal to reverse much of the overnight slide to multi-day lows.
From a technical point of view, XAG/USD once again managed to find decent support and defend the 50% Fibonacci retracement level of the bullish move from $22.00 to $26.95. Subsequent strength favors bullish traders and supports prospects for additional gains.
However, neutral technical indicators on the daily chart warrant some caution. Therefore, it is prudent to wait for some follow-up buying beyond the 38.2% Fibo. Level before traders start positioning for further XAG/USD appreciation moves.
The next relevant hurdle is near the $25.40-$25.50 region, above which momentum could extend towards the $26.00 level. XAG/USD could then accelerate the move towards the $26.40 intermediate resistance on the way to the $27.00 round number.
On the upside, the $24.75 area now appears to be protecting the immediate downside ahead of the $24.55-$24.50 region (50% Fibo level). A convincing downside break would leave XAG/USD vulnerable to slide further towards test levels below $24.00 or the 61.8% Fibo. Step.
The latter coincides with the 200-day SMA and should act as a fulcrum that, if broken, will be seen as a new trigger for bearish traders. This would set the stage for an extension of the recent pullback from the $27.00 neighborhood or the highest since June 2021.
Comments are closed.