- Silver edges higher on Thursday, though lacks any follow-through buying.
- The set-up favours bullish traders and supports prospects for further gains.
- Any fall towards the $20.00 mark could still be seen as a buying opportunity.
Silver sticks to a mildly positive bias through the first half of trading on Thursday and is currently placed around the $20.75-$20.80 region, up over 0.40% for the day.
Given the recent breakout through a multi-month-old descending trend-line hurdle and a sustained move beyond the 100-day SMA, the bias remains tilted in favour of bullish traders. The latter helped limit the intra-week pullback from the highest level since late June and the subsequent bounce adds credence to the near-term positive outlook.
Furthermore, technical indicators on the daily chart are holding comfortably in the bullish territory and are still far from being in the overbought zone. This, in turn, supports prospects for an extension of the recent rally from sub-$18.00 levels and a move back above the $21.00 mark, towards retesting the monthly top near the $21.25 region.
Some follow-through buying has the potential to lift the XAG/USD towards a technically significant 200-day SMA, currently just ahead of the $22.00 round figure. The said handle should act as a pivotal point for short-term traders, which if cleared decisively would set the stage for a further near-term appreciating move.
On the flip side, the overnight swing low, around the $20.35 region, might now protect the immediate downside ahead of the $20.00 mark (100 DMA). Any further decline could be seen as a buying opportunity and remain limited near the descending trend-line resistance breakout point, around the $19.55 area, coinciding with the 50-day SMA.
Silver daily chart
