Silver price rebounds from 200-DMA but 50% Fib level caps the upside. As FXStreet’s Dhwani Mehta notes, 61.8% Fibo support holds the key for XAG/USD.
Defending this key support is critical for XAG/USD bulls
“The bulls still remain cautious amid a steady recovery in the US rates. If the US dollar retreat extends, silver’s recovery momentum could gain traction. It’s worth noting that higher inflation along with a potential lift-off by the Fed usually points to a strengthening US economy, which implies improved prospects for industrial metals such as silver. However, any recovery is likely to remain short-lived in the near term.”
“A sustained break above $26.25, which is the 50% Fibonacci levels of the rally from March lows of $23.78 to May highs of $28.75, is needed to extend the corrective upside, above which the horizontal 100-DMA at $26.63 could be probed. The next relevant barrier is seen at the $27 round number.”
“The Relative Strength Index (RSI) has rebounded from the lower levels but remains below 50.00, suggesting that the bearish bias still holds intact.”
“If the critical support around $25.75 is taken out convincingly, a drop towards the horizontal trendline support at $24.65 will be likely on the cards.”
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