Market Analysis

Silver (XAG/USD) is experiencing renewed upward momentum after yesterday's volatile price fluctuations, reaching a two-week high during the early European trading session on Friday. However, the white metal faces challenges in maintaining its momentum above the key $32.00 level, prompting caution among bullish traders.

From a broader perspective, the recent rebound from the $30.00 psychological threshold and the subsequent upward movement bolster the potential for continued near-term gains. This positive outlook is further supported by daily chart oscillators, which are showing upward momentum and have yet to enter overbought territory.

That said, it is advisable to wait for sustained buying beyond the $32.20-$32.25 resistance before initiating new bullish positions. If this occurs, XAG/USD could aim for its highest level since December 2012, achieved earlier this month, and attempt to breach the $33.00 mark. A decisive move beyond this level would serve as a fresh signal for bullish traders.

Conversely, the $31.65 horizontal support level appears to safeguard the immediate downside, protecting against a decline towards the recent swing low around $31.30. Any further drop could present a buying opportunity, likely to find support near the $31.00 level. However, a significant break below this threshold could trigger technical selling and increase vulnerability for XAG/USD.

Such a downward movement could push the white metal below the $30.75 support level, potentially revisiting last week's swing low around $30.15-$30.10. This area coincides with the 50-day Simple Moving Average (SMA) and is closely followed by the crucial $30.00 mark. A decisive break below this level would likely shift the near-term bias in favor of bearish traders.

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