XAG / USD is delivering intraday gains, still comfortably above the USD 26.00 mark

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  • Silver struggled to hold its modest early gains to the four-day highs.
  • Mixed technical indicators require some caution for bullish traders.

Silver climbed higher during Tuesday’s first half of trading, shooting four-day highs around the $ 26.35 region during the early European session. However, the momentum lacked any enforcement and the commodity has now retreated to the lower end of its daily trading range.

The emergence of a few dip buying on Monday and the subsequent upward move support the prospect of additional gains. That is, the bulls have struggled to find acceptance above the strong resistance at $ 26.30, which coincides with the 50% Fibonacci level of the upside move from $ 23.78 to $ 28.75.

Additionally, the technical indicators on the daily chart have yet to confirm a bullish bias and require some caution before positioning them for any further appreciation move. The technical build suggests that recent price action is widening towards the range ahead of the main US CPI report released on Tuesday.

In the meantime, any subsequent upward move is likely to encounter some resistance near the middle of $ 26.00, followed by the $ 26.80 supply zone, which also marks the 38.2% Fibo. Level. Any continued strength beyond that will undo any short-term negative bias and will result in some short coverage movement.

The XAG / USD could then aim to break the USD 27.00 round mark and further accelerate the positive momentum towards the 23.6% Fibo. Level, about mid $ 27.00.

On the flip side, any decline could continue to attract some purchases near the $ 26.00 to $ 25.90 region. The next relevant support is pegged near the confluence region of $ 25.75-70 – made up of the very important 200-day SMA and the 61.8% Fibo. Level – before June swing lows, around mid $ 25.00.

The ongoing weakness below is seen as a new trigger for bearish traders, setting the stage for an extension of last week’s rejection slide from near 38.2% Fibo. Level. The XAG / USD could then extend the downtrend further to challenge the key psychological level of USD 25.00.

Silver daily chart

Technical levels to watch

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