XAG / USD bounces to a three-week high around $ 22.65-70
- Silver gained some positive traction, shooting to a nearly three-week high on Tuesday.
- Any strength above the 100-period EMA in H4 supports the prospect of additional gains.
- Aggressive traders should be careful with bearish oscillators on the daily chart.
Silver regained positive traction on Tuesday and broke off two consecutive days of bad luck. The momentum pushed spot prices to nearly three-week highs in the first half of the European session, roughly in the $ 22.65-70 range.
Bulls are now trying to build momentum beyond the 100-period EMA on the 4-hour chart, and to extend the recent rebound from the YTD low by the USD 21.40 area touched last week. However, caution should be exercised with mixed technical indicators on hourly / daily charts.
The daily chart’s oscillators are still in bearish territory, although they have bounced back from lower levels, while the 1-hour chart’s RSI is indicating overbought conditions. Still, the intraday setup supports the prospect of further profits.
From the current levels, any subsequent bullish move is likely to encounter stiff resistance near the USD 22.80-85 area. Some follow-up purchases that push it above the USD 23.00 mark could propel the XAG / USD towards the next relevant hurdle near the USD 23.30-35 region.
On the flip side, the $ 22.20-15 area now appears to be protecting the immediate downward move from the round $ 22.00 mark. Any further decline would cancel the positive bias and leave XAG / USD vulnerable to revert to support for the YTD lows around the $ 21.40 region.