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- Silver gained positive traction for the second time in a row on Wednesday.
- The continued move past the confluence of $ 22.65 to $ 70 paved the way for further gains.
- Bearish oscillators on the daily chart warn aggressive bullish traders to be cautious.
Silver gained traction for the second straight day and continued to rebound from its lowest level since November 2020, which was hit around $ 22.00 on Monday. The metal climbed to three-day highs around the $ 22.90 region in the first half of Wednesday’s trading session despite a lack of bullish conviction.
Looking at the technical picture, momentum pushed the XAG / USD through the $ 22.65-70 confluence barrier resulting from the 100-hour SMA and 23.6% Fibonacci youngest leg level of 24.87 – $ 22.04. However, the intraday pullback from near the $ 23.00 mark requires caution with aggressive bullish traders.
Meanwhile, the technical indicators are holding deep in negative territory on the daily chart and losing positive traction on the 1-hour chart. The lineup appears to be tilted in favor of bearish traders, which also makes it wise to wait for subsequent purchases before positioning yourself for more profits.
From current levels, the $ 22.50 area could protect the immediate downward move from the overnight swing lows around the $ 22.25-20 region. This is followed by the round mark of USD 22.00 (YTD lows), which, if broken decisively, is seen as a new trigger for bearish traders and makes the XAG / USD susceptible to further price losses.
The next relevant support is pinned near the September 2020 lows, around the $ 21.65 region, before the XAG / USD finally declines to challenge the $ 21.00 mark for the first time since July 2020 .
On the flip side, momentum is likely to encounter stiff resistance near the 38.2% fibo beyond the $ 22.90 area. Level to the $ 23.10 region. Any continued strength beyond that could trigger a short covering move and the XAG / USD towards the 50% Fibo.
Silver 1 hour chart
Technical levels to watch
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