- Silver struggled to capitalize on last week’s bullish breakout momentum through a trading range.
- The formation of an ascending trend channel supports prospects for additional near-term gains.
- The emergence of dip-buying adds credence to the positive outlook and favours bullish traders.
Silver attracted some buying near the $24.20 resistance breakpoint and has now trimmed a part of its intraday losses. The commodity was seen trading around mid-$24.00s during the early North American session, still down over 0.70% for the day.
Looking at the technical picture, the recent positive move over the past two weeks or so has been along an upward sloping channel on short-term charts. This, along with Friday’s post-NFP bullish breakout through a multi-day-old trading range hurdle, favours bullish traders.
The positive outlook is reinforced by the fact that technical indicators on the daily chart have just started moving into bullish territory. This, in turn, supports prospects for a further near-term appreciating move amid absent relevant market moving economic releases from the US.
That said, a strong follow-through pickup in the US Treasury bond yields and the US dollar demand held bulls from placing aggressive bets. This makes it prudent to wait for a sustained move beyond daily tops, around $24.80-85 zone, before positioning for any meaningful upside.
The XAG/USD might then accelerate the momentum to reclaim the key $25.00 psychological mark and climb further towards the $25.25-30 area. The momentum could get extended towards an intermediate hurdle near the $25.65 zone en-route August monthly swing highs, around the $26.00 mark.
On the flip side, the $24.20 region might continue to protect the immediate downside. This is closely followed by the lower boundary of the mentioned trend-channel, around the $24.05-$24.00 area. A convincing break below the said handle is needed to negate the bullish bias.
The subsequent technical selling has the potential to drag the XAG/USD to the $23.80-75 horizontal zone en-route the $23.50-45 region and strong support near the $23.00 round-figure mark.