- Silver remains confined in a narrow trading band for the fourth straight day on Tuesday.
- The technical setup favours bullish traders and supports prospects for additional gains.
- Any meaningful slide is likely to find decent support near the $24.40-30 horizontal zone.
Silver extends its sideways consolidative price move for the fourth straight day on Tuesday and holds steady around the $25.00 psychological mark through the early European session.
The Relative Strength Index (RIS) on the daily chart is still flashing overbought conditions and holding back bullish traders from placing fresh bets around the XAG/USD. That said, last week’s sustained breakout through the $24.30-$24.40 strong horizontal barrier supports prospects for an extension of the upward trajectory witnessed over the past month or so.
Hence, the range-bound price action might still be categorized as a bullish consolidation phase in the wake of the recent rally to a nearly one-year high touched last week. The constructive near-term technical setup suggests that the path of least resistance for the XAG/USD is to the upside and any meaningful corrective pullback is more likely to attract fresh buyers at lower levels.
Some follow-through buying beyond the YTD peak, around the $25.10-$25.15 area, will reaffirm the positive outlook and lift the XAG/USD further towards the $25.35-$25.40 region. The momentum could get extended towards the $26.00 mark en route to the next relevant hurdle near the $26.20 area, the $26.40-$26.50 zone and the 2022 high, just ahead of the $27.00 mark.
On the flip side, any corrective slide is likely to remain limited near the $24.40-$24.30 resistance-turned-support, which should now act as a pivotal point. A convincing break below could make the XAG/USD vulnerable to weaken below the $24.00 mark and test the $23.60-$23.55 support area before eventually dropping to the $23.15 zone en route to the $23.00 round figure.