XAG/USD traded higher on Friday after it hit support near the 15.37 level. The metal continued drifting north during the European morning Monday, hitting resistance at the 15.52 barrier, which is slightly below Friday’s peak and is also marked by the high of March 13th. Overall, silver has been in a recovery mode since March 7th, with the price structure staying supported by a short-term upside line drawn from the low of that day. So, having that in mind, we believe that there are decent chances for some further recovery, at least in the short run.
A break above the 15.52 level could encourage buyers to challenge Thursday’s high, at around 15.63. However, we would like to see a decisive move above that hurdle before we get more confident on the bullish case. Such a move would confirm a forthcoming higher high on the 4-hour chart and may initially aim for the 15.70 obstacle, the break of which may see scope for more bullish extensions, perhaps towards the 15.80 area, which is fractionally below the peak of February 28th.
Looking at our short-term momentum studies, we see that the RSI rebounded from the crossroads of its respective upside support line and the equilibrium 50 line. The MACD, even though slightly below its trigger line, shows signs of bottoming marginally above zero. It could cross above its trigger soon. These indicators suggest that the white metal may have started picking up positive momentum again, which corroborates our view for some further short-term advances.
In order to start examining whether the bulls have abandoned the field for a while, we would like to see a dip below 15.37. Such a move could signal the break below the aforementioned short-term upside line and may open the path towards the 15.26 barrier, defined by the low of March 20th, Another break lower, below 15.26, may allow the slide to continue towards a longer-term upside support line, taken from the low of November 11th, or even the 15.13 zone, marked by the low of March 14th.
