Silver lacked any firm directional bias and remained confined in a narrow trading band, around mid-$22.00s through the Asian session on Tuesday.
Looking at the broader picture, the XAG/USD – barring the post-NFP spike to over three-week tops – has been oscillating in a familiar range since the beginning of the last week. The range-bound price action constitutes the formation of a rectangle on short-term charts, pointing to indecision over the commodity's near-term trajectory.
Moreover, technical indicators on the daily chart – though have managed to recover from the bearish territory – are yet to gain any meaningful traction. Adding to this, oscillators on the 4-hour chart have been hovering in the neutral territory. This makes it prudent to wait for a sustained break in either direction before placing aggressive bets.
Meanwhile, the top boundary of the mentioned trading range coincides with the 38.2% Fibonacci level of the $24.87-$21.42 downfall and should act as a pivotal point for intraday traders. The next relevant hurdle is pegged near the $23.15-20 confluence region, comprising of 200-period SMA on the 4-hour chart and the 50% Fibo. touched last Friday.
Some follow-through buying will be seen as a fresh trigger for bullish traders and set the stage for a further near-term appreciating move. The XAG/USD might then accelerate the momentum towards the 61.8% Fibo. level, around the $23.55-60 region, before eventually aiming back to reclaim the $24.00 mark for the first time since September 10.
On the flip side, the 23.6% Fibo. level, around the $22.25 area, coinciding with the lower end of the trading range, should protect the immediate downside. This is followed by the $22.00 round-figure mark, which if broken decisively might turn the XAG/USD vulnerable to slide back towards challenging monthly swing lows, around the $21.45-40 region.
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