- Silver pulls back from a fresh one-year high touched earlier this Friday amid overbought RSI.
- The technical setup still favours bulls and supports prospects for a further appreciating move.
- Any meaningful corrective slide might still be seen as a buying opportunity and remain limited.
Silver touches a fresh one-year high on the last day of the week, albeit struggles to capitalize on the move and faces rejection near the $26.00 round-figure mark. The white metal surrenders its modest gains and trades near the lower end of its daily range, around the $25.85-$25.80 region during the early part of the European session.
Against the backdrop of a strong rally witnessed over the past month or so, the slightly overbought Relative Strength Index (RSI) on the daily chart turns out to be a key factor holding back traders from placing fresh bets around the XAG/USD. That said, the recent breakout through the $24.30-$24.40 strong horizontal barrier and a subsequent move beyond the $25.00 psychological mark support prospects for additional gains.
Hence, any subsequent pullback is more likely to attract fresh buyers near the $25.40-$25.35 area, or the overnight swing low. This should help limit the downside for the XAG/USD near the $25.00 mark. That said, a convincing break below the latter might prompt some technical selling and accelerate the corrective slide towards the $24.30-$24.40 resistance-turned-support. The latter should act as a strong near-term base for the metal.
On the flip side, bulls might now wait for some follow-through buying beyond the daily swing high, around the $26.00 mark, before placing fresh bets and positioning for a further appreciating move. The XAG/USD might then climb further towards the next relevant hurdle near the $26.40-$26.50 zone before eventually aiming to test the 2022 peak, just ahead of the $27.00 mark.
Silver daily chart
Key levels to watch
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