- Silver rebounds from over a two-week low, though the upside seems limited.
- The technical setup supports prospects for the emergence of fresh sellers.
- A move beyond a descending trend-line is needed to negate the bearish bias.
Silver (XAG/USD) stages a goodish recovery from the $22.20-$22.15 area, or over a two-week low touched earlier this Thursday and builds on its steady intraday ascent through the first half of the European session. The white metal climbs to a fresh daily peak, around the $22.40 region in the last hour, though the technical setup seems tilted in favour of bearish traders and warrants caution before positioning for any further appreciating move.
The recent repeated failures near the $23.30 supply zone, which coincides with a descending trend-line hurdle extending from the late December peak, and a subsequent breakdown through a short-term trading range validate the negative outlook. Moreover, oscillators on the daily chart have just started gaining negative traction and are still far from being in the oversold territory. This, in turn, suggests that the path of least resistance for the XAG/USD is to the downside and any further move up might still be seen as a selling opportunity.
From current levels, the $22.80-$22.85 region is likely to act as an immediate hurdle ahead of the $23.00 mark, which now nears the descending trend-line resistance. This is closely followed by the 200-day SMA, near the $23.25-$23.30 supply zone, which if cleared decisively might trigger a short-covering move and set the stage for additional gains. The XAG/USD might then aim to reclaim the $24.00 round figure before climbing to the $24.50-$24.60 resistance zone and aiming to reclaim the $25.00 psychological mark.
On the flip side, weakness below the $22.20-$22.15 area could drag the XAG/USD to sub-$22.00 levels, or a two-month trough touched in January. Some follow-through selling might expose the next relevant support near the $21.40-$21.35 region before the metal weakens further below the $21.00 mark, towards the October swing low near the $20.70-$20.65 zone.
Silver daily chart
Technical levels to watch
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