- Silver attracted some buying near the $23.45 region in reaction to the softer US CPI report.
- The lack of follow-through buying warrants caution before positioning for further gains.
- The set-up favours bearish traders and supports prospects for an eventual breakdown.
Silver refreshed daily tops in reaction to softer-than-expected US CPI report, though lacked any follow-through buying. The white metal was last seen trading around the $23.70-65 region, nearly unchanged for the day.
From a technical perspective, the XAG/USD attracted some buying just ahead of August 27 swing lows support near the $23.35 region. Bulls, however, struggled to capitalize on the move and faced rejection near a previous strong support breakpoint, around the $23.80-75 region. The mentioned levels should now act as a key pivotal point for short-term traders and help determine the next leg of a directional move for the commodity.
Meanwhile, technical indicators on 4-hour/daily charts maintained their bearish bias and have also recovered from the oversold territory on the 1-hour chart. The set-up seems tilted firmly in favour of bearish traders and supports prospects for an eventual break to the downside. Hence, a subsequent fall below the $23.00 mark, towards challenging YTD lows around the $22.20-15 region touched on August 8, remains a distinct possibility.
On the flip side, any positive move beyond the $23.75-80 support-turned-resistance might confront stiff resistance near the $24.00 mark. That said, a sustained move beyond might trigger a short-covering move and push the XAG/USD towards the $24.40 intermediate resistance. Bulls might then aim to test monthly tops, around the $24.85 area.
Silver 4-hour chart
Technical levels to watch
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