- Silver continued scaling higher through the first half of the European session on Tuesday.
- The technical set-up favours bullish traders and supports prospects for additional gains.
- A sustained break below the $26.00 mark is needed to negate the constructive outlook.
Silver built on its recent strong rebound from the vicinity of mid-$25.00s, or two-and-half-month lows and gained some follow-through traction on Tuesday. The momentum pushed the commodity to near three-week tops, around the $26.70 region during the first half of the European session.
From a technical perspective, the post-NFP sustained move beyond the $26.30 supply zone, or the 50% Fibonacci level of the $23.78-$28.75 move up was seen as a key trigger for bullish traders. This also seemed to have set the stage for an extension of the ongoing upward trajectory.
The constructive outlook is reinforced by the fact that technical indicators on the daily chart have fully recovered from the bearish territory. Hence, a subsequent move beyond the 38.2% Fibo. level, around the $26.85 region, looks a distinct possibility amid a softer US dollar.
This mentioned hurdle is closely followed by the $27.00 mark. Some follow-through buying might trigger a fresh bout of the short-covering and has the potential to lift the XAG/SUD further towards mid-$27.00s. The latter coincides with the 23.6% Fibo. level and might cap the upside.
On the flip side, the $26.30 resistance breakpoint (50% Fibo. level) now becomes immediate support to defend ahead of the $26.00 mark. A convincing break below will shift the near-term bias back in favour of bearish traders and turn the XAG/USD vulnerable to break below the $25.70 confluence.
The said region comprises the very important 200-day SMA and the 61.8% Fibonacci level of the $23.78-$28.75 move up. Some follow-through selling below mid-$25.00s will reaffirm the bearish break and drag the XAG/USD back towards challenging the key $25.00 psychological mark.
Silver daily chart
-637611642299025518.png)
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0600 as focus shifts to Powell speech
EUR/USD fluctuates in a narrow range above 1.0600 on Tuesday as the better-than-expected Economic Sentiment data from Germany helps the Euro hold its ground. Fed Chairman Powell will speak on the policy outlook later in the day.
GBP/USD stays below 1.2450 after UK employment data
GBP/USD trades marginally lower on the day below 1.2450 in the early European session on Tuesday. The data from the UK showed that the ILO Unemployment Rate in February rose to 4.2% from 4%, weighing on Pound Sterling.
Gold price remains depressed near $2,370 amid bullish USD, lacks follow-through selling
Gold price (XAU/USD) attracts some sellers during the early part of the European session on Tuesday and reverses a major part of the overnight recovery gains from the $2,325-2,324 area, or a multi-day low.
XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference
XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court.
Canada CPI Preview: Inflation expected to accelerate in March, snapping two-month downtrend
The Canadian Consumer Price Index is seen gathering some upside traction in March. The BoC deems risks to the inflation outlook to be balanced. The Canadian Dollar navigates five-month lows against the US Dollar.