Market Analysis

Silver (XAG/USD) has reversed an intraday decline to the $30.75 region, climbing back to the upper end of its daily range during the early European session on Tuesday. The white metal remains in the red for the second consecutive day, currently trading just above the $31.00 level, reflecting a 0.40% drop for the day.

From a technical standpoint, XAG/USD has demonstrated some resilience below the 100-hour Simple Moving Average (SMA). However, mixed oscillator signals on the daily chart suggest caution is warranted before anticipating a continuation of the recent retracement from the $33.00 area, which is the highest point reached since December 2012 earlier this month.

Meanwhile, the daily swing low around $30.75 appears to be safeguarding the immediate downside, followed by support levels at $30.35-$30.25 and the $30.00 mark. Below these, the $29.85-$29.75 confluence, encompassing the 100-day and 50-day SMAs, represents a critical level. A decisive break below this support could trigger bearish sentiment, leading to further declines.

Such a downturn could see XAG/USD falling to the intermediate support at $29.45, with subsequent targets at the $29.00 psychological level and the $28.80-$28.75 region. The bearish trajectory may extend towards the $28.35-$28.30 area before the white metal potentially tests the $28.00 mark, aiming to reach the September monthly swing low around $27.70-$27.65.

Conversely, any upward movement is likely to encounter strong resistance near the $31.50 level. If there’s enough buying momentum, XAG/USD could reclaim the $32.00 mark, followed by resistance at the $32.25 supply zone. Clearing this level could propel XAG/USD back toward the multi-year high, just ahead of the $33.00 round figure reached on October 4.

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