- Silver edged higher on Wednesday and recovered a major part of the overnight losses.
- The emergence of dip-buying near the $26.00 mark supports prospects for further gains.
- Neutral technical indicators on the daily chart warrant some caution for bullish traders.
Silver regained positive traction on Wednesday and climbed to fresh daily tops, around the $26.35-40 region during the early European session, reversing a major part of the overnight losses.
The XAG/USD on Tuesday witnessed a dramatic turnaround from the $26.75-80 resistance marked by the 38.2% Fibonacci level of the $23.78-$28.75 move up. The pullback, however, lacked any follow-through, instead was bought into near the $26.00 round-figure mark.
Given that the XAG/USD had shown resilience below the $25.70 confluence support, the emergence of some dip-buying supports prospects for additional gains. That said, oscillators on the daily chart are yet to confirm the bullish bias and warrant some caution.
From current levels, any subsequent move up beyond the $26.45 horizontal zone might continue to confront resistance near the $26.80 region (38.2% Fibo.). This is followed by the $27.00 mark, above which the XAG/USD could climb further to 23.6% Fibo., around mid-$27.00s.
On the flip side, the $26.00 remains strong support to defend ahead of the $25.70 region. The latter comprises the very important 200-day SMA and the 61.8% Fibo. level, which should now act as a key pivotal point. This is followed by June monthly swing lows, around mid-$25.00s.
Sustained weakness below the mentioned support levels will shift the near-term bias in favour of bearish traders. The XAG/USD might then turn vulnerable and accelerate the fall towards challenging the key $25.00 psychological mark.
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