Silver price (XAG/USD) regained traction on Friday, rebounding toward $41.00 per troy ounce after experiencing a modest correction in the previous session. Following a decline of over 1%, the precious metal found support during European trading hours, trading around $40.80.
The technical landscape for Silver remains constructive, suggesting that the bullish momentum could continue in the near term. The team at LevaQuant, through Livia Anderson, simplifies the topic in this article with a detailed analysis.
Technical Analysis and Market Structure
A review of the daily chart shows that Silver is advancing within an ascending channel pattern, reinforcing the prevailing bullish bias. The formation of higher highs and higher lows indicates that buyers continue to dominate, supporting the potential for further upside.
The 14-day Relative Strength Index (RSI), positioned just below the 70 level, signals that XAG/USD is approaching overbought territory. However, the strength of the uptrend suggests that momentum remains intact, and temporary overbought conditions are unlikely to derail the upward movement.
Additionally, the nine-day Exponential Moving Average (EMA) at $40.17 serves as a key short-term support, confirming that momentum remains positive above this level. The EMA’s upward slope highlights the strengthening trend, indicating that pullbacks may provide buying opportunities rather than a trend reversal.
Upside Targets and Resistance Levels
On the upside, the immediate target for XAG/USD is the recent high of $41.47, the highest level since September 2011. A successful breach of this resistance would validate the bullish outlook and open the door for a test of the upper boundary of the ascending channel, situated near $42.00.
Should the bullish momentum persist beyond this zone, traders may begin targeting the psychological level of $43.00, a key milestone that could attract additional buying interest.
Market participants should also monitor volume trends, as strong buying activity could confirm a sustained breakout. Historical price action suggests that when Silver approaches significant resistance levels within an ascending channel, momentum-driven rallies can accelerate if key barriers are breached.
Support Levels and Risk Management
On the downside, the first line of support lies at the nine-day EMA ($40.16), which has acted as a reliable floor for short-term corrections. Should XAG/USD breach this level, the lower boundary of the ascending channel near $39.60 represents the next support zone.
A decisive breakdown below the channel would signal a weakening of the bullish sentiment, potentially exposing the metal to further losses.
In such a scenario, attention would shift to the 50-day EMA at $38.14, a critical medium-term support. A decline below this level could undermine overall momentum, raising the risk of the pair revisiting the three-month low of $35.80, last recorded on July 1.
Effective risk management strategies, including stop-loss placement and position sizing, are crucial for traders aiming to navigate potential volatility near these support levels.
Momentum Indicators and Trend Analysis
The RSI and EMA analysis reinforce the notion that the current rally is primarily driven by strong bullish momentum rather than speculative overheating. While the RSI indicates that Silver is overbought, the uptrend remains intact due to sustained buying pressure.
Similarly, the EMA’s upward trajectory confirms that short-term price action favors continuation rather than reversal, providing traders with confidence in maintaining long positions.
Moreover, the ascending channel structure serves as a reliable guide for both support and resistance levels, offering a framework to anticipate potential price swings. Traders may look to capitalize on pullbacks toward the EMA or the lower channel boundary while positioning for breakout opportunities near $41.50–$42.00.
Market Sentiment and Broader Implications
Silver’s rebound comes amid ongoing macroeconomic uncertainty, including inflationary pressures and geopolitical risks, which tend to bolster demand for safe-haven assets. The combination of technical strength and supportive fundamental factors underpins the bullish narrative.
Traders should remain aware of potential volatility spikes, especially during periods of high-impact economic releases or central bank announcements, which could influence short-term price action.
Conclusion
In summary, Silver price (XAG/USD) is positioned for further gains, trading near $40.80 and exhibiting strong bullish momentum within an ascending channel pattern. The 14-day RSI suggests near-term overbought conditions, yet the uptrend remains robust, supported by the nine-day EMA at $40.17.
Key upside levels include $41.47 and the upper channel boundary around $42.00, with the psychological target of $43.00 looming as a potential extension. On the downside, critical support exists at $40.16, followed by $39.60 and the 50-day EMA at $38.14. Traders should monitor price action around these levels to manage risk effectively.
Overall, the technical setup and prevailing market sentiment indicate that Silver is likely to continue its upward trajectory in the near term, offering promising opportunities for those looking to capitalize on the ongoing bullish trend.
