XAG / USD bulls hold the upper hand near the USD 24.00 mark, multi-week highs
- Silver received some new bids on Wednesday and was nearing multi-week highs.
- The setup favors bullish traders and supports the prospect of additional short-term gains.
- A sustained break below the $ 23.00 mark is required to negate the constructive outlook.
Silver rallied some dip buying on Wednesday and approached the round $ 24.00 mark in the first half of the European session. Closely followed by six-week highs such as the USD 24.10-15 region touched on Tuesday and the 38.2% Fibonacci level of the USD 28.75-21.42 decline.
With the overnight move beyond a downward trendline extending from the monthly swing highs in July, the short-term bias remains in favor of bullish traders. The positive outlook is reinforced by bullish technical indicators that are far from being in the overbought territory.
This is due to the recent bullish breakout from an inverted head and shoulders neckline and supports the prospect of additional gains. Therefore, a subsequent strength beyond the $ 24.15-20 area towards the next relevant hurdle around the $ 24.75-80 area remains a clear possibility.
Momentum could continue to build and allow XAG / USD to pull back to recapture the key psychological level of USD 25.00. The latter approaches 50% Fibo. Level that, if resolutely overcome, will be seen as a new trigger for bullish traders and pave the way for another short-term appreciation move.
On the flip side, the descending trendline resistance breakpoint around the $ 23.60-55 region now appears to be protecting the immediate downward move from the 23.6% Fibo. Levels, roughly in the range of $ 23.20 to $ 15. This is followed by the round mark of USD 23.00, which should serve as a strong base for the XAG / USD.
A convincing break downside will undo the short-term positive outlook and instead shift the bias in favor of bearish traders and trigger aggressive technical selling. Some consequential weakness below the $ 22.75-70 region will reinforce the negative trend and make the XAG / USD vulnerable to further losses.