Silver Price Analysis: XAG/USD inches closer to $25.35-40 confluence resistance
|- Silver built on the previous day’s solid intraday bounce from over two-month lows.
- Mixed oscillators on hourly/daily charts warrant some caution for aggressive traders.
- A sustained move beyond the $24.40 supply zone is needed to confirm a bullish bias.
Silver showed some resilience below the very important 200-day SMA on Thursday and stage a solid intraday bounce from over two-month lows.
The recovery extended through the early part of the trading action on Friday and pushed the while metal towards the top end of a short-term descending channel. The XAG/USD was last seen trading around the $25.20 region, up 0.70% for the day.
Meanwhile, technical indicators on the 1-hourly chart have been gaining positive traction. However, bearish oscillators on 4-hourly/daily charts warrant some caution before positioning for any strong follow-through positive move.
Hence, any subsequent positive move is more likely to confront stiff resistance near the $25.35-40 supply zone. A sustained move beyond will mark a bullish breakout and prompt some aggressive short-covering move around the XAG/USD.
The commodity might then aim back to reclaim the $26.00 mark. The momentum could further get extended and push the commodity back towards the $26.40-50 supply zone, tested in the aftermath of the dovish FOMC statement last week.
On the flip side, the key $25.00 psychological mark now seems to protect the immediate downside. Failure to defend the mentioned support will shift the bias back in favour of bearish traders and turn the XAg/USD vulnerable.
The next relevant target on the downside is pegged near the $24.65 region (200-DMA), below which the XAG/USD could accelerate the fall towards challenging YTD lows, around the $24.00 mark touched on January 18.
XAG/USD 4-hourly 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.