Silver (XAG/USD) has sustained its upward trajectory for the fourth consecutive day on Tuesday, extending gains beyond the mid-$25.00s during the first half of the European session and edging closer to the year-to-date peak reached last week.
From a technical standpoint, the recent rebound from the $24.35 resistance-turned-support zone, followed by a strong upward movement, signals a favorable environment for bullish traders. Additionally, indicators on the daily chart remain in positive territory and are yet to reach overbought levels, indicating a clear path of least resistance for XAG/USD to the upside.
As a result, there is a distinct possibility of further strength in silver prices, with potential to test the December 2023 swing high just shy of the $26.00 round figure. A continuation of buying momentum would signify a fresh breakout, allowing XAG/USD to resume its robust upward trend observed since late February.
On the downside, any significant corrective decline is expected to attract fresh buying interest near the psychological level of $25.00. The subsequent relevant support is located around the $24.65 region, followed by the pivotal $24.35 zone, which could act as a crucial turning point.
Should selling pressure intensify, it may shift the bias in favor of bearish traders, making XAG/USD vulnerable to further decline towards the $24.15-$24.10 region. A breach below the $24.00 mark could potentially lead to a deeper retracement towards the 50-day Simple Moving Average (SMA), currently positioned near the $23.60 zone.
In summary, silver’s positive momentum persists, with technical indicators favoring further upside movement. However, key resistance and support levels will play a pivotal role in determining the future direction of XAG/USD, as market participants closely monitor developments in the silver market.
