Market Analysis

Silver (XAG/USD) has struggled to build on the previous day's rebound from the $26.45 level, which is the lowest since early May. As a result, it has been fluctuating between modest gains and minor losses during the early European session on Friday. Currently, the white metal appears to be stabilizing in the $27.50-$27.55 range, remaining below the 23.6% Fibonacci retracement level of the July-August decline.

This resistance is around the $27.75 area. A breakout above this level could trigger a short-covering rally, potentially pushing XAG/USD to the $28.00 mark. If the recovery extends, it could reach the 38.2% Fibonacci level near $28.50-$28.55. However, the upside may be capped near the 100-day Simple Moving Average (SMA) around $28.75-$28.80. Further gains could occur if the price moves above $29.00, which would invalidate any short-term bearish outlook and could lead to additional increases.

In such a scenario, XAG/USD might climb to the $29.45 intermediate resistance before targeting the 61.8% Fibonacci level around $29.75. Eventually, it could aim to retake the $30.00 psychological level. Nevertheless, technical indicators on the daily chart, while recovering from lower levels, remain deeply negative, suggesting caution for bullish traders considering further intraday gains.

On the downside, significant support is expected near the $27.30-$27.25 range, followed by the $27.00 mark. A decisive break below these levels could see XAG/USD decline towards $26.50-$26.45, a multi-month low set on Wednesday. 

Paraphrasing text from "FX Street" all rights reserved by the original author.