- Silver witnessed some selling for the third consecutive session on Tuesday.
- The recent range-bound price action warrants caution for aggressive traders.
Silver struggled to capitalize on the previous day’s goodish rebound from the $27.45 region and met with some fresh supply on Tuesday. The commodity maintained its offered tone through the early North American session and was last seen trading around the $27.65 area, down 0.70% for the day.
From a technical perspective, the XAG/USD, so far, has managed to defend a support marked by the 200-period SMA on the 4-hour chart. This is followed by the lower boundary of a near one-month-old trading range, around the $27.20 region, which should now act as a key pivotal point for short-term traders.
Meanwhile, technical indicators on the daily chart – though have been losing the positive momentum – are yet to confirm a bearish bias. This warrants some caution and makes it prudent to wait for a convincing break through the trading range support before positioning for any further downfall.
Some follow-through selling below the $27.00 mark will confirm a near-term bearish break and prompt some aggressive technical selling. The XAG/USD might then accelerate the slide towards the $26.60 horizontal resistance breakpoint, now turned support, en-route the $26.00 round-figure mark.
The downward trajectory could further get extended towards challenging the very important 200-day SMA, currently near the $25.75 region.
On the flip side, the $28.00 mark now seems to have emerged as an immediate strong hurdle ahead of the $28.25-30 supply zone. A sustained strength beyond has the potential to push the XAG/USD towards monthly tops, around the $28.75 region en-route the next relevant resistance near the $29.00 mark.
XAG/USD 4-hour chart
Technical levels to watch
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