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- Silver made a modest rebound from 200-hour SMA support on Tuesday.
- Moving past a descending channel should pave the way for further gains.
- Any subsequent positive move could still be viewed as a sales opportunity.
Silver rallied some dip buying near the 200-hour SMA and maintained its bidding tone during Tuesday’s Central European session. The commodity was last traded near the daily highs, somewhere in the $ 25.45-50 range, up over 0.10% for the day. The aforementioned area marks the upper bound of a three day old descending trend channel which, if resolved, could pave the way for additional intraday gains. The XAG / USD could then accelerate the positive move back towards the supply zone of $ 25.75-80.
The latter coincides with the very important 200-day SMA. which should act as the central hub for short-term traders. Any sustained move beyond that will set the stage for the recent rebound to extend from mid-$ 24.00 or near the four-month low hit in July. Some follow-up purchases beyond the round $ 26.00 mark will reinforce the positive outlook. The XAG / USD could then accelerate momentum and rise to test the next relevant hurdle near the $ 26.35-40 region.
On the flip side, the $ 25.25-20 (200-HMA) area now appears to have turned out to be immediate strong support. This is followed by the key psychological level of USD 25.00, below which the XAG / USD could slide further towards the monthly swing lows in July around the middle of USD 24.00. The downtrend could be extended further, pulling XAG / USD towards the $ 24.00 level at the YTD lows, around the $ 23.80-75 region touched in March.
Silver 1 hour chart
Technical levels to watch
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