Silver (XAG/USD) has pulled back after reaching a weekly high of $32.64, falling below the key psychological level of $32.00 following the release of mixed US jobs data. The strengthening of US Treasury bond yields and the continued strength of the US Dollar have acted as headwinds for the grey metal. As of now, XAG/USD is trading at $31.82, showing losses of over 1%.
Technical Outlook
Despite the recent pullback, silver has managed to sustain a strong trading range. Currently, XAG/USD is expected to consolidate between $31.00 and $32.60 unless the bulls manage to push prices above the $33.00 mark.
Momentum Indicators:
The Relative Strength Index (RSI) has shifted bearish in the short term, indicating that momentum has waned. However, the RSI is still above its neutral line, suggesting that buyers are still in control of the broader trend.
Bullish Outlook:
For the uptrend to continue, XAG/USD needs to break above the $33.00 level. A decisive move above this level could trigger a test of the swing high from October 29 at $34.54, potentially leading to a challenge of last year’s peak at $34.86.
Bearish Outlook:
On the downside, if silver fails to hold its ground above $31.00, there is a potential for a deeper correction. A break below the 100-day Simple Moving Average (SMA) at $31.10 would likely open the door for further downside, with key support levels at $31.00 and $30.47 (50-day SMA). The 200-day SMA at $30.27 would be the next major support to watch.
Summary:
Silver’s price is currently facing resistance at $32.60 and could consolidate in the range of $31.00 – $32.60. A breakout above $33.00 could fuel further upside, while failure to hold above $31.00 may lead to a deeper correction. Traders should closely monitor the technical levels and momentum indicators for signs of direction.
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