- Silver once again attracted some dip-buying near the key $25.00 psychological mark.
- The set-up still favours bearish traders and supports prospects for further weakness.
- A sustained move beyond the $26.00 mark is needed to negate the bearish outlook.
Silver (XAG/USD) managed to regain some positive traction on Tuesday and stalled the previous day’s retracement slide from the $26.00 mark. The intraday positive move pushed the metal to fresh daily tops, around mid-$25.00s during the early European session.
From a technical perspective, the XAG/USD once again managed to find decent support near the key $25.00 psychological mark. The mentioned level marks the 50% Fibonacci level of the $21.90-$30.07 strong move up and should now act as a key pivotal point for short-term traders. Meanwhile, technical indicators on the 1-hourly chart have just started moving back into the positive territory. That said, bearish oscillators on 4-hourly/daily charts warrant caution for bulls, instead supports prospects for the emergence of some fresh selling at higher levels.
Hence, any subsequent positive move might still be seen as an opportunity for bearish traders and runs the risk of fizzling out rather quickly. The XAG/USD still seems vulnerable to prolong its recent sharp retracement slide from the $30.00 level touched on February 1. Sustained weakness below the 61.8% Fibo. level, nearing five-week lows around the $24.85-80 region set on Friday, will reaffirm the bearish bias. The XAG/USD might then accelerate the slide further towards challenging the very important 200-day SMA, currently near the $24.00 mark.
On the flip side, the overnight swing highs, around the $26.00 mark (50% Fibo. level) should continue to act as immediate strong resistance. A convincing breakthrough will negate the near-term bearish outlook and prompt some aggressive short-covering move. The XAG/USD could then climb back towards the $26.75-80 supply zone before eventually darting towards the 38.2% Fibo. level, around the $27.00 round-figure mark.
XAG/USD daily chart
Technical levels to watch
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