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- Silver rallied some buying near the 200-hour SMA and climbed higher on Friday.
- The short term technical setup remains firmly in favor of bearish traders.
- Sustained move past the night high is needed to reverse the bearish bias.
Silver stopped the previous day’s retracement slide from the two-week highs and pulled in some dip buying on the last trading day of the week. The commodity held its modest gains during the first half of European trading session and most recently hovered near the $ 26.10-15 region.
From a technical perspective, the XAG / USD appears to have formed a strong base near the 200-hour SMA for the time being, which should now act as a major hub for short-term traders. Given that the positive move is struggling overnight to gain acceptance above the $ 26.30 supply zone, the bias still appears to be in favor of bearish traders.
However, the XAG / USD has shown below the confluence support of $ 25.70 which consists of the very important 200-day SMA and the 61.8% Fibonacci level of the upside move from $ 23.78 to $ 28.75. So it is wise to wait for some follow-up sales below the mentioned region before positioning yourself for another devaluation move.
Meanwhile, although the technical indicators on the daily chart have bounced back from negative territory, they have yet to confirm a bullish bias. This increases the credibility of the short-term negative trend. Therefore, a later positive move back towards the mentioned confluence region could still be seen as a sales opportunity.
However, a compelling breakthrough leading to a subsequent move above the $ 26.55-60 hurdle could propel the XAG / USD further towards 38.2% Fibo. Level to the $ 26.85 region. This is followed by the USD 27.00 mark, above which the next relevant resistance is pegged near the middle of USD 27.00 or the 23.6% Fibo. Level.
On the flip side, any significant pullback could be below the $ 26.00 to $ 25.95 (200-hour SMA) area ahead of weekly swing lows of about $ 25.00 (about an ongoing weakness below that) could vulnerable the XAG / USD and pave the way for a decline to challenge the key psychological level of USD 25.00.
Silver daily chart
Technical levels to watch
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