- Silver is seen consolidating the previous day’s positive move to over a one-week high.
- The mixed technical setup warrants some caution before placing aggressive bullish bets.
- Sustained Weakness back below the $23.00 mark should pave the way for deeper losses.
Silver struggles to capitalize on the previous day's positive move and oscillated in a narrow trading band through the early part of the European session on Thursday. The white metal is currently placed around the $23.50-$23.55 region, representing the 23.6% Fibonacci retracement level of the recent downfall from over a one-year high.
From a technical perspective, the overnight sustained strength and close above the 100-day Simple Moving Average (SMA) favours bullish traders. That said, oscillators on the daily chart - though have been recovering - are yet to confirm the positive outlook. This makes it prudent to wait for some follow-through buying beyond the $23.60 area, or over a one-week high touched on Wednesday, before positioning for any further gains.
The XAG/USD might then surpass the $24.00 mark and accelerate the momentum towards the next relevant hurdle near the $24.20-$24.25 region en route to the $24.40-$24.50 horizontal support breakpoint. The latter coincides with the 50% Fibo. level, above which a fresh bout of a short-covering should allow bullish traders to reclaim the $25.00 psychological mark. The upward trajectory could get extended towards the $25.30-$25.35 supply zone.
On the flip side, weakness back below the 100-day SMA, currently around the $23..35 area, could find some support near the $23.00 round figure. This is followed by the May monthly swing low, around the $22.70-$22.65 region, which if broken decisively will be seen as a fresh trigger for bearish traders. The XAG/USD might then turn vulnerable to weaker further towards the $22.25 intermediate support before dropping to the $22.00 round figure.
Silver daily chart
Key levels to watch
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