Silver Price Analysis: XAG/USD clings to gains near two-day tops, comfortably above $27.00
|- Silver edged higher for the second straight session and moved further away from weekly lows.
- The set-up seems tilted in favour of bullish traders and supports prospects for additional gains.
- Sustained weakness below the $26.70 confluence support will negate the constructive outlook.
Silver reversed an intraday dip to the $26.80 region and is now looking to build on the overnight rebound from one-week lows. The white metal turned positive for the second straight session and shot to two-day tops, around the $27.30 region during the early European session.
Looking at the technical picture, the XAG/USD has been trending higher along an upward sloping channel extending from YTD lows, around the $23.80-75 region touched on March 31. The recent pullback from the $27.65-70 region stalled near the lower boundary of the mentioned channel.
The emergence of some dip-buying near the trend-channel support and the subsequent positive move favours bullish traders. That said, repeated failures near the 61.8% Fibonacci level of the $30.07-$23.78 downfall warrant some caution before positioning for any strong gains.
From current levels, any further positive move might continue to confront stiff resistance near the $27.65-70 region. A convincing breakthrough should push the XAG/USD beyond the $28.00 mark, towards challenging the trend-channel hurdle near the $28.25-30 supply zone.
On the flip side, weakness below the $27.00 mark is likely to be limited by the trend-channel support, around the $26.80 region. This coincides with 100-period SMA on the 4-hour chart, which if broken decisively will shift the near-term bias in favour of bearish traders.
The next relevant support is pegged near the $26.15-10 area (38.2% Fibo.), below which the XAG/USD might turn vulnerable to break below the $26.00 mark. This will eventually expose the $25.00 psychological mark, with some intermediate support near the $25.30-25 zone (23.6% Fibo.).
XAG/USD 4-hour chart
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.