- Silver confirms a breakout through a multi-day-old trading range and touches a fresh one-year high.
- The RSI on the daily chart is flashing overbought conditions and warrants caution for bullish traders.
- Any corrective pullback below the $25.00 mark is more likely to get bought into and remain limited.
Silver gains strong follow-through traction on Wednesday and touches a fresh one-year high, around the $25.40 area during the early part of the European session. The white metal now seems to have confirmed a bullish breakout through a four-day-old trading band and seems poised to prolong its recent upward trajectory witnessed over the past month or so.
That said, Relative Strength Index (RSI) on the daily chart is already flashing overbought conditions and warrants some caution for bullish traders. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before positioning for any further near-term appreciating move for the XAG/USD. Meanwhile, any corrective decline is more likely to find decent support near the $25.00 psychological mark.
Sustained weakness below might prompt some technical selling and drag the XAG/USD towards the $24.30-$24.40 horizontal resistance breakpoint, now turned support. The said area should act as a pivotal point, which if broken decisively could make the commodity vulnerable to weaken below the $24.00 mark and test the $23.60-$23.55 support area before eventually dropping to the $23.15 zone en route to the $23.00 round figure.
On the flip side, momentum beyond the $25.40 area, or the YTD peak, could get extended and allow the XAG/USD to reclaim the $26.00 mark. The next relevant hurdle is pegged near the $26.20 area ahead of the $26.40-$26.50 zone, above which bulls could aim to challenge the 2022 swing high, just ahead of the $27.00 mark.
Silver daily chart
Key levels to watch
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