Near the 200-hour SMA, silver received some buying and pushed higher on Friday.
The short-term technical setup is still heavily stacked in favor of bearish traders.
To overcome the negative bias, a persistent move above the overnight highs is required.
On the penultimate trading day of the week, silver halted the previous day’s retracement decline from two-week highs, attracting some dip-buying. During the first part of the European session, the commodity maintained its small gains and was last seen lingering around the $26.10-15 range.
From a technical standpoint, the XAG/USD appears to have created a sturdy base near the 200-hour SMA for the time being, which should now serve as a significant pivotal point for short-term traders. Given the overnight positive move’s inability to gain traction above the $26.30 supply zone, bearish traders appear to have the upper hand.
However, the XAG/USD has shown strength below the $25.70 confluence support, which includes the 200-day SMA and the 61.8 percent Fibonacci level of the $23.78-$28.75 rise up. This makes it smart to hold off on any additional depreciation until there is some follow-through selling below the indicated zone.
Meanwhile, technical indicators on the daily chart have yet to show a bullish bias, despite the fact that they have recovered from negative territory. This strengthens the case for a near-term negative bias. As a result, any following upward movement towards the stated confluence region could be viewed as a selling opportunity.
A strong breakout, leading to a move past the $26.55-60 barrier, might take the XAG/USD even higher, towards the 38.2 percent Fibo. level, around the $26.85 zone. The next key barrier is at the mid-$27.00s, or the 23.6 percent Fibo. level, over which the next relevant obstacle is pegged near the $27.00 mark.
On the other hand, any significant decline below the $26.00-$25.95 zone (200-hour SMA) may find solid support near the $25.70 region ahead of weekly swing lows in the mid-$25.00s. Sustained weakening below might make the XAG/USD vulnerable, opening the door for a drop towards the important $25.00 psychological level./n
