This technical setup favors bullish traders and supports prospects of further gains.
A sustained break below the ascending support channel would negate the positive bias.
Silver traded between modest gains and minor losses during the European session’s first half. It was last seen trading in the $25.85 to $25.80 area, almost unchanged for the day. The overnight pullback from resistance at the top of an ascending channel that has been around for two weeks is a warning sign to be cautious before placing directional trades.
The XAG/USD seems to have stabilised around the 61.8% Fibonacci level of the $26.95 -$23.97 fall. Bulls will need to buy more follow-through above $26.00 in order to trigger a new trend. This will create the conditions for a move towards challenging the trend channel resistance at $26.35 and higher.
This coincides with the March daily closing high. The XAG/USD may retest the YTD peak closer to $27.00 and then climb further towards $27.65-$27.70. The outlook has been reinforced by the fact technical indicators on daily chart are gaining positive momentum and are far from being overbought.
Any meaningful slide could find support at the $25.50-25.45 confluence. This confluence is composed of the 50% Fibo. The lower end of ascending channel and the level at which it is currently trading. If the XAG/USD falls below this level, it could cause further weakness towards the 38.2% Fibo. The $25.00 psychological mark should be a key point.
