XAG/USD holds steady above $24.00, bulls await a move beyond 50% Fibo.

• Silver lacks any firm intraday direction and oscillates in a range on Wednesday.
• The setup seems tilted in favour of bulls and supports prospects for further gains.
• Dips towards the 200-day SMA are likely to be bought into and remain limited.

Silver (XAG/USD) struggled to capitalize on the overnight positive move and oscillates in a narrow trading band, just above the $24.00 mark through the early European session on Wednesday.

From a technical perspective, the XAG/USD last week showed some resilience below an upward-sloping trend line extending from the October swing low. The subsequent rally from the mid-$22.00s, or a one-month low, however, struggled to make it through the 50% Fibonacci retracement level of the downfall from the December peak. The said barrier is pegged near the $24.20-$24.25 region, which if cleared decisively will be seen as a fresh trigger for bullish traders.

Meanwhile, oscillators on the daily chart have recovered from the bearish territory, though are yet to gain any positive traction. This makes it prudent to wait for some follow-through beyond the aforementioned resistance before positioning for any further appreciating move. The XAG/USD might then accelerate the momentum towards reclaiming the $25.00 psychological mark and then extend the momentum to the $25.25 hurdle en route to the $25.45-$25.50 region.

On the flip side, any meaningful downfall is likely to find decent support and attract fresh buyers near the very important 200-day Simple Moving Average (SMA), currently pegged near the $23.60 zone. A convincing break below will expose the next relevant support near the $23.30-$23.25 region before the XAG/USD drops to a multi-month-old ascending trend-line support, currently near the $23.00 mark, and the monthly swing low, around mid-$22.00s.

Silver daily chart

Technical levels to watch