- Silver fluctuates within a range on the final trading day of the week.
- A mixed technical outlook suggests that aggressive traders should proceed with caution.
- A sustained move above $32.00 could pave the way for further gains.
Silver (XAG/USD) is currently finding it difficult to build on a modest intraday uptick, trading around the $31.15 level during the first half of the European session on Friday, reflecting little change for the day.
In the broader context, this week's bounce from the $30.00 psychological level and subsequent movement above $31.00 are favorable for bullish traders. However, repeated failures to gain momentum beyond the $32.00 level have led to the formation of a bearish multiple-tops pattern. Coupled with mixed oscillator signals on the daily chart, this situation necessitates caution before making significant bullish bets on XAG/USD.
From current levels, the immediate resistance is likely around the $31.55 region, followed by the $31.75-$31.80 range and the $32.00 mark. If these levels are breached decisively, it could open the door for a rally toward the resistance near the $32.25 supply zone, potentially propelling XAG/USD back to multi-year highs, just shy of the $33.00 figure reached last Friday. Continued buying pressure may pave the way toward the December 2012 swing high near the $33.85 level.
Conversely, if XAG/USD dips below the $31.00 level, immediate support is expected around the $30.70-$30.65 range, followed by additional support at $30.35-$30.25 and the key psychological level of $30.00. The next significant support level lies near the $29.80-$29.70 confluence, which includes the 100-day and 50-day Simple Moving Averages (SMAs). A breach of this pivotal point could lead to an extension of the recent decline from December 2012 highs.
In such a scenario, silver may accelerate its decline toward the $29.00 level, potentially testing the $28.60-$28.50 zone. A further downward trajectory could extend to the $28.10-$28.00 area, moving toward the September monthly swing low around $27.70.
Sliver daily chart
