XAG/USD corrects from multi-week high and slides to $23.75-$70 range
- Silver saw an intraday reversal from the four-week high set on Friday last week.
- The setup favors bullish traders and supports the prospects for dip buying to occur.
- Continued strength above $24.00 is needed to confirm the bullish outlook in the near term.
Silver continued its fight for acceptance above the $24.00 level and saw an intraday reversal from the four-week high set on Friday last week. The white metal appears to have broken three days of winning streak for now and was last trading near the daily low around the $23.75-$23.70 region heading into the North American session.
From a technical perspective, the recent strong rebound from the monthly low around $22.00 is running along an upsloping channel and suggests a near-term uptrend. The constructive lineup is reinforced by the fact that the daily chart’s technical indicators are comfortably staying in positive territory and are far from being in the overbought territory.
However, repeated failures near the above handle warrant some caution for aggressive bullish traders. Therefore, it is prudent to wait for continued strength beyond $24.00 before positioning for a move towards the $24.25 confluence barrier. The latter includes the very important 200-day SMA and a descending trendline extending from the July 2021 swing high.
A convincing break will be seen as a new trigger for bullish traders and push the XAG/USD pair back towards the YTD high around the $24.70 region. The momentum could extend further to reclaim the key psychological level of $25.00 on the way from the November 2021 high, around the $25.35-$24.40 range.
On the downside, any further decline on the downside is likely to find decent support near the $23.30 region ahead of the $23 bout. If the mentioned support levels are not defended, the bias will shift in favor of bearish traders and leave XAG/USD vulnerable. The next relevant support is near the $22.75 region, below which the metal could slide to the mid-$22.00 level.