Silver Price Analysis: XAG/USD bulls flirt with multi-day descending channel resistance

• Silver staged a modest bounce on Tuesday from 200-hour SMA support.
• Move beyond a descending channel should pave the way for further gains.
• Any subsequent positive move might still be seen as a selling opportunity.

Silver attracted some dip-buying near 200-hour SMA and maintained its bid tone through the mid-European session on Tuesday. The commodity was last seen trading near daily tops, around the $25.45-50 region, up over 0.10% for the day. The mentioned area marks the top boundary of a three-day-old descending trend-channel, which if cleared decisively could pave the way for additional intraday gains. The XAG/USD might then accelerate the positive move back towards the $25.75-80 supply zone.

The latter coincides with the very important 200-day SMA. which should act as a key pivotal point for short-term traders. A sustained move beyond will set the stage for an extension of the recent bounce from mid-$24.00s, or near four-month lows touched in July. Some follow-through buying beyond the $26.00 round-figure mark will reaffirm the positive outlook. The XAG/USD might then accelerate the momentum and climb to test the next relevant hurdle near the $26.35-40 region.

On the flip side, the $25.25-20 area (200-HMA) now seems to have emerged as immediate strong support. This is closely followed by the key $25.00 psychological mark, below which the XAG/USD could slide further towards July monthly swing lows, around mid-$24.00s. The downward trajectory could further get extended and drag the XAG/USD towards the $24.00 mark en-route YTD lows, around the $23.80-75 region touched in March.

Silver 1-hour chart

Technical levels to watch