Silver Price Analysis: XAG/USD retreats from one-year peak amid overbought RSI
|- Silver gains strong positive traction on Wednesday and touches a fresh one-year top.
- The RSI on the daily chart is flashing overbought conditions and capping the upside.
- The technical setup still supports prospects for a further near-term appreciating move.
Silver catches aggressive bids near the $25.00 psychological mark during the early North American session and spikes to a fresh one-year high in the last hour. The white metal, however, surrenders a major part of its intraday gains and is currently placed around the $25.20-$25.15 area, still up over 0.50% for the day.
The Relative Strength Index (RSI) on the daily chart is holding above the 70.00 mark and points to extremely overbought conditions. This, in turn, is holding back bullish traders from placing fresh bets around the XAG/USD and keeping a lid on any further gains, at least for the time being. The positive technical setup, however, supports prospects for an extension of the recent appreciating move witnessed over the past month or so.
Sustained strength and acceptance above the $25.00 mark add credence to the near-term positive outlook. Some follow-through buying beyond the daily swing high, around the $25.65 region, will be seen as a fresh trigger for bullish traders and set the stage for a move towards reclaiming the $26.00 mark. The XAG/USD could climb further towards the $26.40-$26.50 intermediate resistance en route to the 2022 top, just ahead of the $27.00 mark.
On the flip side, any meaningful pullback might continue to attract fresh buyers near the $25.00 psychological mark. This should help limit the downside for the XAG/USD near the $24.30-$24.40 resistance breakpoint, now turned support. That said, a convincing break below could make the commodity vulnerable to weaken below the $24.00 mark and test the $23.60-$23.55 support before dropping to the $23.15 zone en route to the $23.00 mark.
Silver 4-hour chart
Key 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.