- Silver regains some positive traction following the overnight pullback from a multi-month peak.
- RSI (14) on the daily chart warrants caution for bulls and before positioning for additional gains.
- Any meaningful corrective pullback could be seen as a buying opportunity and remain limited.
Silver attracts some dip-buying near the $21.25 area on Wednesday and climbs back to the very important 200-day SMA during the early European session. The white metal, however, remains below the highest level since June 22 touched the previous day and is currently placed around the mid-$21.00s.
Looking at the broader picture, the overnight sustained breakout through the $21.00 mark was seen as a fresh trigger for bullish traders. That said, RSI (14) on the daily chart has moved on the verge of breaking into the overbought territory. This makes it prudent to wait for a sustained strength beyond a technically significant moving average before positioning for any further near-term appreciating move.
The XAGUSD might then accelerate the momentum and aim to reclaim the $22.00 round-figure mark. The next relevant hurdle is pegged near the $22.30-$22.35 region, which is closely followed by the June swing high, around mid-$22.00s. The latter should act as a key pivotal point and a tough nut to crack for bulls. That said, some follow-through buying will set the stage for an extension of the bullish trajectory.
On the flip side, any meaningful pullback now seems to find decent support around the $21.00 mark. Any subsequent fall could be seen as a buying opportunity and remain limited near the mid-$20.00s, or the overnight swing low. Failure to defend the said support levels might negate the near-term positive bias and make the XAGUSD vulnerable to dropping back to test levels below the $20.00 psychological mark.
Silver daily chart
Key levels to watch
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