- Silver once again failed to make it through a stronger resistance near the $26.30 supply zone.
- The set-up favours bearish traders and supports prospects for an eventual break to the downside.
- A sustained move beyond monthly swing highs is needed to negate the near-term negative bias.
Silver continued with its struggle to capitalize on the move beyond the $26.30 strong resistance zone and edged lower on the last trading day of the week. The white metal remained depressed through the early North American session, with bears now awaiting a sustained break below the $26.00 mark.
The mentioned handle is closely followed by the very important 200-day SMA, around the $25.85 region, and the 61.8% Fibonacci level of the $23.78-$28.75 move up, near the $25.70-65 region. Some follow-through selling below monthly swing lows, around mid-$25.00s, will be seen as a fresh trigger for bearish traders and set the stage for additional losses.
Meanwhile, oscillators on the daily chart are holding in the negative territory. This, along with the fact that the XAG/USD has repeated failed to find acceptance above the $50% Fibo., supports prospects for an eventual break to the downside. Hence, a subsequent slide towards the next relevant support, near the key $25.00 psychological mark, looks a distinct possibility.
On the flip side, the $26.30 supply zone might continue to act as an immediate strong resistance ahead of weekly tops, around the $26.45 region. Above the mentioned barriers, the XAG/USD is likely to appreciating further. That said, the momentum is more likely to run out of steam near monthly swing highs, around the $26.75-80 region, which nears the 38.2% Fibo. level.
Only a sustained move beyond will negate near-term negative bias, rather prompt some technical buying. The XAG/USD might then aim to surpass the $27.00 mark and accelerate the positive momentum further towards the 23.6% Fibo. level, around mid-$27.00s.
Silver daily chart
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Technical levels to watch
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