Silver Price Analysis: XAG/USD bulls await a sustained move

(August 5) Silver found some support near 200-hour SMA and for now, seems to have stalled the previous day's rejection slide from the $26.00 mark, or near three-week tops. The commodity held on to its modest intraday gains through the mid-European session and was last seen trading near daily tops, just below mid-$25.00s.

The latter marks the 38.2% Fibonacci level of the $24.50-$26.00 positive move, above which the XAG/USD could climb further towards the $25.65-70 supply zone, or the 23.6% Fibo. level. Some follow-through buying will be seen as a fresh trigger for bullish traders and set the stage for a move back towards the $26.00 mark.

Meanwhile, slightly negative technical indicators on hourly/daily charts favour bearish traders and support prospects for the emergence of some selling at higher levels. However, it will still be prudent to wait for sustained weakness below the $25.30 region (200-HMA) before positioning for any meaningful decline.

The XAG/USD might then turn vulnerable to break below the 50% Fibo. level and accelerate the slide back towards the key $25.00 psychological mark. This coincides with the 61.8% Fibo. level, which if broken decisively will negate any near-term positive outlook and prompt some aggressive technical selling.

The next relevant support is pegged near July monthly swing lows, around mid-$24.00s. The downward trajectory could further get extended and drag the XAG/USD back towards the $24.00 mark en-route YTD lows, around the $23.80-75 region touched in March.

FXStreet