Home Silver Price Analysis: XAG/USD trades with modest gains below 61.8% Fibo. level
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Silver Price Analysis: XAG/USD trades with modest gains below 61.8% Fibo. level

  • Silver regained positive traction on Tuesday and erased the overnight modest losses.
  • The technical set-up favours bullish traders and supports prospects for additional gains.
  • Only a sustained break below the $27.00 mark will negate the near-term positive bias.

Silver attracted some dip-buying on Tuesday and stalled the previous day’s retracement slide from the highest level since February 25. The white metal was last seen trading near the $27.40-50 region, up around 0.40% for the day.

From current levels, any subsequent move up might confront resistance near the overnight swing highs, around the $27.85 region. This coincides with the 61.8% Fibonacci level of the $30.07-$23.78 downfall and is followed by the $28.00 mark.

A convincing breakthrough will be seen as a fresh trigger for bullish traders and pave the way for an extension of the recent rally from YTD lows touched in March. The constructive outlook is reinforced by bullish technical indicators on the daily chart.

Hence, some follow-through strength towards testing the next relevant hurdle, near the $28.80-85 supply zone, remains a distinct possibility. The momentum could allow bulls to aim back to reclaim the $29.00 level for the first time since early February.

On the flip side, any meaningful slide might still be seen as an opportunity to initiate fresh bullish positions and remain limited near the $27.00 mark. The latter coincides with the 50% Fibo. level and should act as a key pivotal point.

Sustained weakness below might prompt some technical selling and accelerate the slide to mid-$26.00s. The corrective decline has the potential to drag the XAG/USD further towards testing a confluence support near the $26.20-10 area – comprising 38.2% Fibo. level, 100-day SMA and a short-term ascending trend-line.

XAG/USD daily chart

fxsoriginal

Technical levels to watch

 

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