- Silver gained some positive traction on Tuesday, though lacked any follow-through.
- Bulls seem struggling to make it through the 200-period SMA on the 4-hour chart.
- The neutral technical setup warrants caution before placing fresh directional bets.
Silver attracted fresh buying near the mid-$21.00s region on Tuesday and inched back closer to the previous day's swing high during the first half of the European session. The white metal was last seen trading around the $21.65 region, up nearly 0.50% for the day.
Looking at the broader picture, the XAG/USD has been oscillating in a familiar range over the past four sessions and continued with its struggle to make it through the 200-period SMA on the 4-hour chart. The said barrier, currently around the $21.80 area, is closely followed by the $21-90-$22.00 supply zone, which should act as a pivotal point.
Meanwhile, technical indicators on hourly/daily charts, so far, have struggled to gain any meaningful traction and warrant caution before placing aggressive directional bets. This further makes it prudent to wait for a sustained move in either direction before traders start positioning for a firm near-term trajectory for the XAG/USD.
A convincing break through the $21.50-$21.45 horizontal support would be seen as a fresh trigger for bearish traders. The XAG/USD might then drop back to the $21.00 mark en-route the monthly low, around the $20.90 region. The depreciating move could get extended and drag spot prices to the YTD low, around the $20.45 region set in May.
On the flip side, sustained strength beyond the $22.00 mark should pave the way for a move towards an intermediate resistance near the $22.30 area en-route the $22.50-$22.60 supply zone. Some follow-through buying would shift the bias in favour of bullish traders and allow the XAG/USD to reclaim the $23.00 round-figure mark.
Silver 4-hour chart
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Key levels to watch
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