- Silver lacked any firm direction and was range bound on Wednesday.
- The technical setup remains firmly tilted in favor of bearish traders.
- A sustained move above $19.50 is needed to negate the bearish bias.
Silver is struggling to capitalize on the previous day’s positive move and finds itself in a tight trading band on Wednesday. The white metal vacillated between tepid gains and marginal losses during the early European session, although it managed to hold steady above the mid-$18.00 level.
Looking at the broader picture, XAG/USD has been trading in a familiar range for the past week or so. Given the recent decline from the mid-$22.00 level or June’s monthly high, range-bound price action could now be classified as a bearish consolidation phase, which is hinting further losses.
Furthermore, repeated failures near the round figure of $19.00 suggest that the short-term sell-off may be far from over. The negative outlook is compounded by the fact that the technical indicators on the daily chart remain deep in bearish territory.
Therefore, any subsequent upward move could still be seen as a selling opportunity near the $19.00 level. Some follow-on buying has the potential to push XAG/USD further higher, although the momentum risks fading fairly quickly near the strong $19.40-$19.50 supply zone.
On the upside, the YTD low in the $18.20-$18.15 range now appears to be acting as an immediate strong support. This is followed by the round figure of $18.00 which, if decisively broken, would mark a fresh bearish breakdown and set the stage for another short-term depreciation move.
XAG/USD might then accelerate the crash towards the $17.45-$17.40 interim support on the way to $17.00. The downside could be further extended and spot prices could eventually fall to test the next relevant support near the $16.70-$16.60 region.
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