Silver Price Analysis: XAG/USD clings to gains above $26.00 mark, bearish bias remains
- Silver attracted some buying near 200-hour SMA and edged higher on Friday.
- The near-term technical setup remains tilted firmly in favour of bearish traders.
- A sustained move beyond the overnight highs is needed to negate the bearish bias.
Silver stalled the previous day's retracement slide from two-week tops and attracted some dip-buying on the last trading day of the week. The commodity held on to its modest gains through the first half of the European session and was last seen hovering near the $26.10-15 region.
From a technical perspective, the XAG/USD, for now, seems to have formed a strong base near 200-hour SMA, which should now act as a key pivotal point for short-term traders. Given that the overnight positive move struggle to find acceptance above the $26.30 supply zone, the bias still seems tilted in favour of bearish traders.
That said, the XAG/USD has been showing resilience below the $25.70 confluence support, comprising of the very important 200-day SMA and the 61.8% Fibonacci level of the $23.78-$28.75 move up. This makes it prudent to wait for some follow-through selling below the mentioned region before positioning for any further depreciating move.
Meanwhile, technical indicators on the daily chart – though have been recovering from the negative territory – are yet to confirm a bullish bias. This adds credence to the near-term negative bias. Hence, any subsequent positive move back towards the mentioned confluence region might still be seen as a selling opportunity.
However, a convincing breakthrough, leading to a subsequent move beyond the $26.55-60 hurdle, might push the XAG/USD further towards the 38.2% Fibo. level, around the $26.85 region. This is followed by the $27.00 mark, above which the next relevant resistance is pegged near mid-$27.00s, or the 23.6% Fibo. level.
On the flip side, any meaningful pullback below the $26.00-$25.95 region (200-hour SMA) might continue to find decent support near the $25.70 region ahead of weekly swing lows, around mid-$25.00s. Sustained weakness below might turn the XAG/USD vulnerable and pave the way for a fall towards challenging the key $25.00 psychological mark.
Silver daily chart
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Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
