Silver Price Analysis: XAG/USD bulls retain control near YTD top, overbought RSI warrants caution

Silver confirms a breakout through a multi-day-old trading range and touches a fresh one-year high.
The RSI on the daily chart is flashing overbought conditions and warrants caution for bullish traders.
Any corrective pullback below the $25.00 mark is more likely to get bought into and remain limited.

Haresh Menghani FXStreet

Silver gains strong follow-through traction on Wednesday and touches a fresh one-year high, around the $25.65 area during the US session. The white metal now seems to have confirmed a bullish breakout through a four-day-old trading band and seems poised to prolong its recent upward trajectory witnessed over the past month or so.

That said, Relative Strength Index (RSI) on the daily chart is already flashing overbought conditions and warrants some caution for bullish traders. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before positioning for any further near-term appreciating move for the XAG/USD. Meanwhile, any corrective decline is more likely to find decent support near the $25.00 psychological mark.

Sustained weakness below might prompt some technical selling and drag the XAG/USD towards the $24.30-$24.40 horizontal resistance breakpoint, now turned support. The said area should act as a pivotal point, which if broken decisively could make the commodity vulnerable to weaken below the $24.00 mark and test the $23.60-$23.55 support area before eventually dropping to the $23.15 zone en route to the $23.00 round figure.

On the flip side, momentum beyond the $25.60s, or the YTD peak, could get extended and allow the XAG/USD to reclaim the $26.00 mark. The next relevant hurdle is pegged near the $26.20 area ahead of the $26.40-$26.50 zone, above which bulls could aim to challenge the 2022 swing high, just ahead of the $27.00 mark.

Silver daily chart

Key levels to watch

XAG/USD

Overview
Today last price	25.32
Today Daily Change	0.27
Today Daily Change %	1.08
Today daily open	25.05

Trends
Daily SMA20	23.43
Daily SMA50	22.34
Daily SMA100	22.8
Daily SMA200	21.16

Levels
Previous Daily High	25.14
Previous Daily Low	24.84
Previous Weekly High	25.14
Previous Weekly Low	23.57
Previous Monthly High	24.16
Previous Monthly Low	19.9
Daily Fibonacci 38.2%	25.02
Daily Fibonacci 61.8%	24.95
Daily Pivot Point S1	24.88
Daily Pivot Point S2	24.71
Daily Pivot Point S3	24.58
Daily Pivot Point R1	25.18
Daily Pivot Point R2	25.31
Daily Pivot Point R3	25.48

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD slides below 1.3250 after failing to break through 23.6% Fibo

The GBP/USD pair meets with a fresh supply during the Asian session on Wednesday and moves away from a nearly two-week high around the 1.3275 region, touched the previous day. Spot prices currently trade around the 1.3235 zone, down 0.20% for the day, as traders look to speeches from Bank of England Governor Andrew Bailey and Federal Reserve Chair Kevin Warsh for a fresh impetus.

EUR/USD keeps losses near 1.1400 after soft Eurozone inflation data

EUR/USD keeps the offered tone intact near 1.1400 in European trading on Wednesday, pressured by softer Euronze and German inflation readings and receding bets for aggressive tightening by the European Central Bank (ECB). Traders will take more cues from the US Manufacturing PMI due later in the day.

Gold stays in red below $4,000, awaits Warsh's speech

Gold remains under selling pressure below $4,000, in the red for the third straight day on Wednesday. The Iran uncertainty and Fed hike bets support the USD, weighing on the commodity. Traders now look to Fed Chair Warsh's speech and the US data for a fresh impetus.

ISM Manufacturing PMI expected to signal continued expansion in the US

Attention shifts to Wednesday’s release of the June ISM Manufacturing Purchasing Managers Index, one of the most closely followed indicators of activity in the US manufacturing sector and an important barometer of the broader economy. Markets expect the headline index to remain unchanged at 54.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The European Central Bank Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Federal Reserve, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.