Silver Price Forecast: XAG/USD recovers further to $47.50; not out of the woods yet
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Silver attracts buyers on Wednesday and moves away from an over one-month low.
The mixed technical setup warrants caution before positioning for any further gains.
Bears need to wait for a break below the $45.55 confluence before placing fresh bets.
Silver (XAG/USD) is trading with a positive bias during the Asian session on Wednesday and looking to build on the overnight bounce from the vicinity of mid-$45.00s, or the lowest level since September 25. The white metal hovers around the $47.45-47.50 area, up 0.80% for the day, though the uptick lacks bullish conviction ahead of the highly-anticipated FOMC rate decision.
From a technical perspective, the XAG/USD found decent support near the 50-day Exponential Moving Average (SMA) on Tuesday, which now coincides with the 50% Fibonacci retracement level of the August-October blowout rally. Furthermore, the subsequent move up suggests that the recent corrective decline from the all-time peak touched earlier this month might have run its course. However, oscillators on the daily chart have just started gaining negative traction.
Hence, any further move up beyond the $48.00 round figure is more likely to attract some sellers and face stiff resistance near the $48.65-$48.70 region. However, some follow-through buying beyond the $49.00 mark might negate the negative outlook and trigger a fresh wave of the short-covering move. The XAG/USD might then extend the recovery momentum towards the $49.45 intermediate resistance before aiming towards reclaiming the $50.00 psychological mark.
On the flip side, the $47.00-$46.95 area now seems to protect the immediate downside, below which the XAG/USD could slide back below the $46.00 round figure and retest the overnight swing low, around the $45.55 confluence. A convincing break below the latter will be seen as a fresh trigger for bearish traders and make the white metal extend the fall to the $45.00 psychological mark en route to the $44.45 region, the $44.00 mark, and the $43.55 area (61.8% Fibo. level).
Silver daily chart
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