Silver Price Analysis: XAG/USD bulls have the upper hand, could aim to conquer $26.00 mark

NEW YORK (May 3) Silver struggles to capitalize on the previous day's solid bounce from the vicinity of the $24.50-$24.40 strong horizontal support and edges lower during the first half of trading on Wednesday. The white metal sticks to a mildly negative tone and remains below mid-$25.00s through the early European session, though the downside potential seems limited.

From a technical perspective, the XAG/USD has been showing some resilience near the 23.6% Fibonacci retracement level of the March-April rally and the subsequent rally favours bullish traders. Moreover, positive oscillators on the daily chart, which are still far from being in the overbought zone, support prospects for a further near-term appreciating move.

Some follow-through buying beyond the $25.50-$25.60 supply zone will reaffirm the positive outlook and allow the XAG/USD to make a fresh attempt to conquer the $26.00 round-figure mark. This is closely followed by a one-year high touched in April, above which the white metal could climb to the $26.25-$26.30 region en route to the $27.00 round-figure mark.

On the flip side, the $25.00 psychological mark now seems to protect the immediate downside. Any further fall might still be seen as a buying opportunity and remain limited near the $24.50-$24.40 region. The latter should act as a key pivotal point, which if broken will negate any positive outlook and shift the near-term bias in favour of bearish traders.

The XAG/USD might then weaken further below the $24.00 mark and accelerate the slide towards testing the 38.2% Fibo. level, around the $23.70 area. The corrective decline could get extended further to the next relevant support near the $23.35-$23.30 area before the white metal eventually drops to the $23.00 round-figure mark, representing the 50% Fibo. level.

FXStreet