Silver Price Forecast: XAG/USD extends range play above $38.00 mark
- Silver edges higher on Tuesday, though it lacks follow-through and remains confined in a band.
- The mixed technical setup warrants caution before positioning for a firm near-term direction.
- A sustained strength beyond the $38.25-$38.30 hurdle would negate near-term negative bias.
Silver (XAG/USD) extends its sideways consolidative price move for the third straight day, though it manages to hold above the $38.00 mark through the Asian session on Wednesday.
From a technical perspective, the range-bound price action constitutes the formation of a rectangle on hourly charts. Against the backdrop of the recent pullback from a multi-year peak, this could be categorized as a bearish consolidation phase. However, positive oscillators on hourly/daily charts warrant some caution before positioning for deeper losses.
Meanwhile, a sustained strength beyond the $38.25-$38.30 region, or the top boundary of the trading range, has the potential to lift the XAG/USD to the next relevant hurdle near the $38.70 area en route to the $39.00 round figure. The momentum could extend further towards the $39.50 area, or the highest since February 2012 touched last month.
On the flip side, acceptance below the $38.00 mark would reaffirm the negative bias and make the XAG/USD vulnerable to accelerate the fall further toward the $37.35-$37.30 region. The latter represents the lower end of a short-term ascending channel and should act as a key pivotal point, which, if broken, should pave the way for deeper losses.
Silver 4-hour chart
