- Silver managed to recover a major part of its early lost ground to over one-week lows.
- The near-term technical set-up might have shifted back in favour of bearish traders.
- Sustained weakness below the $26.70 confluence is needed to confirm negative bias.
Silver attracted some dip-buying just ahead of the $25.70 confluence support and staged a modest intraday bounce from over one-week lows touched earlier this Thursday.
The XAG/USD was last seen hovering near the top end of its daily trading range, just above the $26.00 mark. The uptick allowed the commodity to stall this week’s retracement slide from the $26.75-80 resistance, or the 38.2% Fibonacci level of the $23.78-$28.75 move up.
Meanwhile, technical indicators on the daily chart – though have been recovering from lower levels – are still holding in the negative territory. This, along with the lack of any strong follow-through buying, supports prospects for a further near-term depreciating move.
That said, the emergence of some buying at lower levels makes it prudent to wait for a convincing break through the $25.70 region before placing fresh bearish bets. This comprises the very important 200-day SMA and the 61.8% Fibo. level, which should act as a key pivotal point.
Some follow-through selling below June monthly swing lows, around mid-$25.00s, will reaffirm the bearish bias and turn the XAG/USD vulnerable. The downward trajectory could then get extended and drag the white metal towards challenging the key $25.00 psychological mark.
On the flip side, the 26.25-30 static resistance, coinciding with the 50% Fibo. level, now seems to cap any meaningful upside ahead of the $26.45-50 region. Sustained strength beyond has the potential to lift the XAG/USD back towards the 38.2% Fibo. level, around the $26.75-80 region.
The next relevant resistance is pegged near the $27.00 round-figure mark, above which the XAG/USD could climb further towards the 23.6% Fibo. level, around mid-$27.00s.
Silver daily chart
