XAG/USD steadily climbs to $19.00, a two-week high
- Silver is up for the third straight day, hitting a two-week high on Friday.
- The mixed technical setup warrants caution for bulls before positioning for further upside.
- A convincing break below $18.00 is needed to shift the bias in favor of the bears.
Silver continues its recent recovery move from the lowest since June 2020, gaining traction for the third straight day on Friday. This also marks the fifth day of positive movement in the previous six days, taking the white metal to a two-week high, closer to $19.00 during the first half of the European session.
This week’s breakout of the top of a nearly month-old descending channel and subsequent strength above the 100-period SMA on the 4-hour chart is seen as a key trigger for bullish traders. This may have set the stage for additional near-term gains, although mixed oscillators on the hourly/daily chart warrant some caution.
Technical indicators on the daily chart, while recovering from negative territory, have yet to confirm a bullish bias. Furthermore, the 4-hour chart’s RSI (14) is already signaling slightly overbought conditions. Therefore, it is prudent to wait for some consolidation or a modest pullback before positioning for the next move higher.
From current levels, any significant dip near the $18.60-$18.50 region is likely to find decent support ahead of the breakpoint of the descending trend channel currently lying around the $18.20-$18.15 zone . Some follow-up selling below $18.00 will negate the positive bias and suggest that the corrective recovery has run out of steam.
On the downside, momentum above the round figure of $19.00 on the 4-hour chart is likely to face stiff resistance near the 200-day SMA. The said barrier, currently hovering around the $19.35 region, should now act as a key pivot. Continued strength above this will confirm the constructive outlook and pave the way for further upside.