Siler recovers further from the YTD low as it gains momentum for the second day in a row.
The set-up favors bearish traders and bolsters the likelihood of additional near-term losses.
The negative outlook could be erased by sustained strength above the $22.00 convergence.Â
On Wednesday, silver scales higher for the second day in a row after recovering from the $20.40 area, or a nearly four-month low. The white metal, on the other hand, loses some of its intraday gains and now trades around $21.00, still up nearly 0.50 percent for the day as the North American session begins.
When taken as a whole, the XAG/USD pair showed some resilience on Tuesday even though it was below the 61.8% Fibonacci retracement level of the recent rise from the low in October 2022. The aforementioned support, which lies around $20.60, ought to now serve as a pivotal point. The daily chart’s technical indicators appear to still favor bearish traders, despite recovering from the oversold zone and remaining deep in negative territory.
As a result, the current recovery move is more likely to encounter significant resistance near 50 percent Fibo. level, prior to the mid-$21.00 range, around $21.35. Any subsequent strength runs the risk of fizzling out close to the $22.00 confluence support breakpoint, which could be interpreted as a selling opportunity. The mentioned handle has 38.2% Fibo and a 100-day Simple Moving Average (SMA). level, which, if cleared, could cancel out the bearish bias in the near term.
The XAG/USD may rise toward the $22.55-$22.60 supply zone in the event of sustained strength beyond. The $23.00 round-figure mark, which coincides with the 23.6% Fibo, may be the ultimate goal for bulls. level.
Contrarily, 61.8 percent Fibo. The immediate downside appears to be protected at the level, around $20.60. The XAG/USD should be susceptible to further weakness if some follow-through selling occurs below the overnight swing low, which is located around $20.40. A fall below the psychological level of $20.00 should pave the way for testing the next relevant support in the $19.75-$19.70 range.
