- Silver caught fresh bids on Wednesday and jumped to over one-week tops in the last hour.
- A sustained move beyond the $26.25-30 region might have set the stage for further gains.
- The $25.75-70 confluence support should now act as a strong near-term base for the metal.
Silver regained positive traction on Wednesday and shot to over one-week tops, closer to mid-$26.00s during the early North American session. This marked the third day of a positive move in the previous four and pushed the white metal decisively above the $26.25-30 supply zone.
The mentioned hurdle coincided with the 50% Fibonacci level of the $23.78-$28.75 move up and a sustained move beyond might have already set the stage for additional gains. The positive outlook is reinforced by the recent repeated rebound from the $25.75-70 confluence region.
The latter comprises the very important 200-day SMA and the 61.8% Fibo. level, which should continue to act as a key pivotal point for short-term traders. This is followed by June swing lows, around mid-$25.00s, which if broken will shift the bias in favour of bearish traders.
In the meantime, any meaningful pullback might continue to attract some buying near the $26.00-$25.90 region. This, in turn, should help limit the downside near the $25.75-70 confluence support, which should act as a strong base for the XAG/USD, at least in the near term.
Meanwhile, technical indicators on the daily chart have recovered from the negative territory but are yet to confirm a bullish bias. Hence, any subsequent move up is more likely to confront stiff resistance near the $26.75-80 region, or monthly swing highs touched last week.
This marks the 38.2% Fibo. level, which if cleared decisively will pave the way for an extension of the ongoing positive momentum. 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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