- Silver added to the previous day’s post-FOMC gains and climbed to over two-week tops.
- Bulls now await a move beyond the $26.60 confluence hurdle before placing fresh bets.
Silver built on the overnight post-FOMC positive move and gained some follow-through traction through the Asian session on Thursday. A sustained move beyond the 100-period SMA on the 4-hourly chart was seen as a key trigger for bullish traders and pushed the commodity to over two-week tops, around the $26.60 region.
The momentum, however, stalled near the 50% Fibonacci level of the $28.33-$24.83 downfall. This coincides with a two-week-old ascending trend-line, which along with another upward sloping trend-line, constitutes the formation of a rising wedge pattern. The latter has been acting as strong support over the past two weeks or so.
Meanwhile, technical indicators on the daily chart, so far, have been struggling to gain any meaningful positive momentum. Moreover, RSI (14) on hourly charts has moved on the verge of breaking into the overbought zone. The set-up, in turn, warrants some caution for bulls and before positioning for any further appreciating move.
That said, a convincing break through the trend-line resistance will negate the bearish pattern and pave the way for additional gains. The XAG/USD might then climb towards testing the 61.8% Fibo. level, around the $26.90-$27.00 region. The momentum could further get extended towards the next major hurdle near the $27.60 horizontal zone.
On the flip side, the 100-period SMA resistance breakpoint, around the $26.30-25 area now seems to protect the immediate downside. This is closely followed by the 38.2% Fibo. level support, near the $26.15-10 zone and the lower end of the wedge pattern, around the $25.90-85 region, which if broken will shift the bias back in favour of bearish traders.
XAG/USD 4-hourly chart
Technical levels to watch
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