- Silver lacked any firm direction and oscillated in a range on Wednesday.
- The technical set-up remains firmly tilted in favour of bearish traders.
- A sustained move beyond $19.50 is needed to negate the negative bias.
Silver is seen struggling to capitalize on the previous day's positive move, finding itself oscillating in a narrow trading band on Wednesday. The white metal seesawed between tepid gains/minor losses through the early European session, although it has managed to hold steady above the mid-$18.00s.
Looking at the broader picture, the XAG/USD has been trading in a familiar range over the past one-and-a-half weeks or so. Given the recent fall from mid-$22.00s or the June monthly high, the rangebound price moves could now be categorized as a bearish consolidation phase, suggesting further loses to come.
Furthermore, repeated failures near the $19.00 round figure suggest that the near-term selling bias might still be far from being over. The negative outlook is reinforced by the fact that technical indicators on the daily chart are holding deep in bearish territory.
Hence, any subsequent move up might still be seen as a selling opportunity near the $19.00 mark. Some follow-through buying has the potential to lift the XAG/USD further, though the momentum runs the risk of fizzling out rather quickly near the $19.40-$19.50 heavy supply zone.
On the flip side, the YTD low, around the $18.20-$18.15 region, now seems to act as immediate strong support. This is followed by the $18.00 round figure, which if broken decisively would mark a fresh bearish breakdown and set the stage for a further near-term depreciating move.
The XAG/USD could then accelerate the downfall towards the $17.45-$17.40 intermediate support en-route to the $17.00 mark. The downward trajectory could further get extended and spot prices could eventually drop to test the next relevant support near the $16.70-$16.60 region.
Silver 4-hour chart
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Key levels to watch
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