XAG/USD holds gains near the daily high, around the mid-$19.00 area
- Silver regains positive traction on Wednesday, recovering some of the overnight decline.
- The emergence of dip buying favors bullish traders and supports prospects for more gains.
- A convincing break through a multi-month descending trend line will confirm the positive bias.
Silver attracts some buying near the $19.25 region or 50-day SMA support on Wednesday, reversing part of the overnight retracement foil from a nearly four-week high. The white metal maintains its bidding tone through the first half of the European session and it is currently just above the mid-$19.00 level.
Technically, the recent bounce off the $17.55 area or above a two-year low on Tuesday has stalled near descending trendline resistance. The said barrier, which is currently near the psychological $20.00 level, extends from the monthly swing high in May and should act as a linchpin. A convincing breakout is seen as a new trigger for bulls and sets the stage for additional gains.
Given that technical indicators on the daily chart have just started moving into bullish territory, XAG/USD could then rise to test the 100-day SMA near the $20.45 region . Some follow-up buying should allow spot prices to work towards reclaiming the round figure of $21.00 again. The momentum could extend further towards the next relevant hurdle around the $21.50 area.
On the downside, the $19.25 (50 DMA) region seems to have turned out to be immediate strong support. Closely followed by $19.00 which if broken could trigger some technical selling around XAG/USD. However, the ensuing plunge could still be viewed as a buying opportunity and remain capped near the $18.45-$18.40 support zone, which should serve as a strong base for the metal.