- Silver edged higher for the third consecutive session, though lacked any follow-through.
- Bulls struggled to find acceptance, or build on the momentum beyond the $28.00 mark.
- The set-up supports prospects for an upside breakout through the recent trading range.
Silver built on the previous session’s goodish bounce from one-week lows and gained some follow-through traction on the first day of a new trading week. This marked the third straight day of an uptick, through bulls struggled to find acceptance above the $28.00 mark or capitalize on the move.
Looking at the broader technical picture, the XAG/USD has been oscillating in a range over the past two weeks or so. The recent price moves constituted the formation of a rectangle, marking a consolidation phase and pointing to indecision over the white metal’s next leg of a directional move.
Meanwhile, bullish technical indicators on daily/hourly charts support prospects for an eventual breakout to the upside. That said, it will still be prudent to wait for some follow-through buying beyond the $28.25.30 supply zone before positioning for any further near-term appreciating move.
The next relevant hurdle is pegged near May monthly swing highs, around the $28.75 region, above which the XAG/USD seems all set to surpass the $29.00 round figure. The momentum could further get extended towards an intermediate hurdle near the $29.50 area en-route the key $30.00 psychological mark.
On the flip side, any meaningful slide might continue to attract some dip-buying near mid-$27.00s. This, in turn, should help limit the downside near the trading range support, around the $27.25-20 region, which if broken decisively might shift the bias in favour of bearish traders.
Subsequent selling below the $27.00 mark would turn the XAG/USD vulnerable to accelerate the decline towards mid-$26.00s before dropping to the $26.10-$26.00 support zone.
