- Silver catches fresh bids on Wednesday and advances to over a one-week high.
- The technical setup warrants some caution before positioning for further gains.
- A sustained move beyond $22.20-30 will be seen as a positive trigger for bulls.
Silver regains positive traction following the previous day’s modest fall and climbs to over a one-week high during the early part of the European session on Wednesday. The white metal currently trades just above the $22.00 mark, up nearly 1% for the day, and looks to build on the recent goodish recovery move from a seven-month low touched last week.
Any subsequent move up, however, is likely to confront stiff resistance near the $22.30-$22.20 horizontal support breakpoint. The said area should act as a key pivotal point, which if cleared decisively might prompt an aggressive short-covering rally and lift the XAG/USD to the $23.00 mark. The momentum could get extended further towards challenging the 200-day SMA, currently around the $23.35 area.
Technical indicators on the daily chart, meanwhile, have been recovering from lower levels, though are yet to confirm a positive outlook. This, in turn, warrants some caution before placing fresh bullish bets around the XAG/USD and positioning for any further near-term appreciating move.
On the flip side, the $21.85-$21.80 zone now seems to protect the immediate downside ahead of the overnight swing low, around the $21.65-$21.60 region. Some follow-through selling could drag the XAG/USD back towards a multi-day-old trading range resistance breakpoint, now turned support, around the $21.3-$21.30 region. The next relevant support is pegged near the $21.00 round-figure mark.
A convincing break below the latter will expose the $20.70-$20.65 region, or the multi-month trough, below which the XAG/USD could prolong the downfall towards challenging the YTD low – levels just below the $20.00 psychological mark.
Silver daily chart
Technical levels to watch
Read the full article here