- Silver oscillates in a narrow trading band through the first half of trading on Monday.
- The technical setup favours bullish traders and supports prospects for further gains.
- A convincing break below the $24.50-40 area is needed to negate the positive bias.
Silver fails to capitalize on Friday’s bounce from the 200-hour Simple Moving Average (SMA) and oscillates in a narrow trading band through the early European session on the first day of a new week. The white metal currently trades around the $25.65-$2,5.70 region, nearly unchanged for the day, though the technical setup favours bullish traders.
The recently repeated rebounds from the $24.50-$24.40 strong horizontal resistance breakpoint, now turned support, and the emergence of some dip-buying on Friday validates the near-term positive outlook. Moreover, the Relative Strength Index (RSI) on the daily chart has eased from the overbought territory and supports prospects for a further appreciating move.
That said, the XAG/USD has been struggling to build on its momentum beyond the $26.00 mark, making it prudent to wait for a sustained strength beyond the said handle before placing fresh bullish bets. The commodity might then surpass an intermediate barrier near the $26.25-$26.30 and aim to test the March 2022 swing high, just ahead of the $27.00 round figure.
On the flip side, Friday’s swing low, around the $25.15 region now seems to protect the immediate downside. This is closely followed by the $25.00 psychological mark, below which the XAG/USD could extend the corrective decline towards testing the $24.50-$24.40 resistance-turned-support. A convincing break below the latter could negate the positive outlook.
The XAG/USD might then turn vulnerable to weaken further below the $24.00 mark and drop to the next relevant support near the $23.50-$23.30 confluence. The latter comprises the 50-day and the 100-day SMAs and is followed by support near the $23.00 round-figure mark.