XAG/USD sticks to modest intraday gains, remains below $24.00

• Silver attracts dip-buying on Tuesday and snaps a two-day losing streak.
• The mixed technical setup warrants caution for aggressive bullish traders.
• A break below an ascending trend line will shift the bias in favour of bears.

Silver (XAG/USD) regains some positive traction on Tuesday and sticks to its modest intraday gains through the early part of the European session. The white metal currently trades around the $23.85-$23.90 region, up 0.30% for the day, and for now, seems to have snapped a two-day losing streak.

From a technical perspective, the recent recovery from mid-$22.00s, or a one-month low touched last week, struggled to find acceptance above the 50% Fibonacci retracement level of the downfall from the December swing high. Moreover, oscillators on the daily chart, though have recovered from bearish territory, are yet to gain positive traction and warrant some caution for aggressive bullish traders.

The subsequent pullback, however, remains limited, allowing the XAG/USD to hold above the very important 200-day Simple Moving Average (SMA). The said support is currently pegged near the $23.60 region and should act as a key pivotal point. A convincing break below will make the XAG/USD vulnerable to test sub-$23.00 levels, representing an ascending trend-line support extending from October.

On the flip side, momentum beyond the $24.00 mark might continue to face stiff resistance near the $24.25-$24.30 region, or the 50% Fibo. level. A sustained strength beyond will be seen as a fresh trigger for bullish traders and allow the XAG/USD to reclaim the $25.00 psychological mark. The momentum could get extended beyond the $25.25 intermediate hurdle, towards the $25.45-$25.50 region.

The next relevant barrier is seen near the $26.00 neighbourhood, or the highest level since May 5 touched earlier this month, which if cleared decisively will set the stage for a further near-term appreciating move.

Silver daily chart

Technical levels to watch