Silver built on the previous day’s strong positive move and edged higher for the second consecutive session on Wednesday. The momentum pushed the commodity back closer to a resistance marked by the 61.8% Fibonacci level of the $26.64-$23.78 decline, around the $25.50-60 region.
Meanwhile, technical indicators on the daily chart have recovered from the negative territory but are yet to confirm a bullish bias. Moreover, RSI on the 1-hour chart has moved on the verge of breaking into the overbought zone, warranting caution for aggressive bullish traders.
Hence, it will be prudent to wait for a sustained move beyond the $25.60 hurdle before positioning for any further appreciating move. The subsequent short-covering move could push the XAG/USD beyond the $26.00 mark, towards the next major barrier near the $26.40-50 heavy supply zone.
On the flip side, the 50% Fibo. level, around the $25.20 region now seems to protect the immediate downside. This is followed by the key $25.00 psychological mark, which if broken decisively will negate the positive outlook and prompted some technical selling around the XAG/USD.
Some follow-through selling below the 38.2% Fibo. level, around the $24.85 region will shift the bias back in favour of bearish traders and turn the XAG/USD vulnerable. The next relevant bearish target is pegged near the $24.45 region, or 23.6% Fibo. level ahead of the $24.00 mark.