silver has seen renewed interest recently, particularly during the Asian trading session on Tuesday, as it recovered from a multi-day low. The metal now trades around $31.35, marking a 0.60% increase and breaking a two-day losing streak. This bounce comes after reaching lows near the $30.90-$30.85 range, a critical support level that bears are closely monitoring for potential weaknesses.
From a technical viewpoint, the recent breakdown below the 23.6% Fibonacci retracement level of the strong rally beginning from September raises some concerns for bullish traders. Oscillators on the 4-hour chart are showing a bearish trend, implying that there may be additional selling pressure at higher levels. This situation suggests that investors should exercise caution before anticipating a continuation of the upward momentum seen in recent weeks.
Despite the challenges, the bounce off the sub-$31.00 levels and the positive indicators on the daily chart imply that the XAG/USD might still have an upward trajectory. Should the price continue to rise, it is likely to encounter resistance near the $31.80 level, with additional hurdles around the $32.00 level. A substantial move beyond this point could lead the price toward the $32.25 level as it seeks to approach its multi-year peak near $32.70.
On the downside, the established support range of $30.90-$30.85, in proximity to the 38.2% Fibonacci level, remains crucial. A drop below this level could result in a swift decline toward the 50% Fibonacci retracement around $30.25. This downward momentum could potentially extend further to the psychological threshold of $30.00, eventually leading towards a confluence support area between $29.70 and $29.65, which includes both the 61.8% Fibonacci level and the 200-period Simple Moving Average on the 4-hour chart.
