- Silver extended the overnight retracement slide and witnessed heavy selling on Wednesday.
- Mixed oscillators warrant some caution before confirming that the metal has formed a top.
- A sustained move back above the $28.25-30 region will negate any near-term negative bias.
Silver witnessed some heavy selling on Wednesday and extended the previous day’s retracement slide from the highest level since early February. The commodity continued losing ground through the first half of the European session and touched an intraday low, near the $27.65 region in the last hour.
The mentioned area marks a previous strong resistance breakpoint. The next relevant support is pegged near the $27.35 area (weekly low) ahead of the $27.00 confluence – comprising 100-period SMA on the 4-hour chart and an ascending trend-line extending from YTD lows touched in March.
Meanwhile, technical indicators on hourly charts have been gaining negative traction and favour intraday bearish traders. That said, oscillators on the daily chart are still holding comfortably in the bullish territory and support prospects for the emergence of some dip-buying at lower levels.
Hence, it will be prudent to wait for some strong follow-through selling below the $27.00 mark before confirming that the XAG/USD has topped out already. This, in turn, should pave the way for a further near-term depreciating move towards 200-period SMA support, currently near the $26.25 region.
On the flip side, any meaningful move up might now confront immediate resistance near the $28.00 mark. This is closely followed by the $28.25-30 supply zone, which if cleared decisively will negate any negative bias. The XAG/USD might then aim to surpass the overnight swing highs near the $28.75 area.
Bulls might eventually lift the white metal beyond the $29.00 round-figure mark, towards the $29.30-35 intermediate hurdle en-route the key $30.00 psychological mark.
Silver 4-hour chart
Technical levels to watch
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