- Silver drifts lower on the last day of the week, though lacks any follow-through selling.
- The technical setup still favours bullish traders and supports prospects for further gains.
- A convincing break below the $24.40-30 area is needed to negate the positive outlook.
Silver comes under some selling pressure on the last day of the week and extends its steady intraday descent through the first half of the European session. The white metal slips below the $25.00 psychological mark, though manage to hold its neck above the 100-period Simple Moving (SMA) on the 4-hour chart.
Technical indicators on the 4-hour chart have just started gaining negative traction, though are holding comfortably in the bullish territory on the daily chart. This, in turn, supports prospects for the emergence of some dip-buying at lower levels and suggests that the path of least resistance for the XAG/USD is to the upside. Hence, any subsequent slide is more likely to find decent support near the 23.6% Fibonacci retracement level of the March-April rally, around the $24.65 zone.
This is followed by the $24.40-$24.30 strong horizontal resistance breakpoint, now turned support, which if broken might negate the positive outlook and shift the near-term bias in favour of bearish traders. The XAG/USD might then turn vulnerable to weaken further below the $24.00 mark and test the 38.2% Fibo. level. Some follow-through selling should pave the way for an extension of the recent pullback from a one-year high, around the $26.10 region touched last week.
On the flip side, the $25.50-$25.60 region now seems to have emerged as an immediate strong resistance, above which the XAG/USD is likely to make a fresh attempt to conquer the $26.00 mark. Some follow-through buying will mark a fresh bullish breakout and set the stage for a further near-term appreciating move.
Silver 4-hour chart
Key levels to watch
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