• Silver struggled to gain any meaningful traction and oscillated in a range on Tuesday.
• The technical set-up favours bullish traders and supports prospects for further gains.
• Sustained break below the ascending channel support would negate the positive bias.

Silver seesawed between tepid gains/minor losses through the first half of the European session and was last seen trading around the $25.85-$25.80 region, nearly unchanged for the day. Given the overnight pullback from a resistance marked by the top boundary of a two-week-old ascending channel, the range-bound price action warrants caution before placing directional bets.

Looking at the broader picture, the XAG/USD now seems to have stabilized around the 61.8% Fibonacci retracement level of the $26.95-$23.97 downfall. Some follow-through buying beyond the $26.00 mark will be seen as a fresh trigger for bulls. This will set the stage for a move back towards challenging the trend channel resistance, currently around the $26.35 region.

The latter coincides with March daily closing high, above which the XAG/USD might aim back to retest the YTD peak, closer to the $27.00 mark and climb further towards the $27.65-$27.70 region. The outlook is reinforced by the fact that technical indicators on the daily chart have been gaining positive traction and are still far from being in overbought territory.

On the flip side, any meaningful slide might now find decent support near the $25.50-$25.45 confluence, comprising the 50% Fibo. level and the lower end of the ascending channel. Sustained weakness below would make the XAG/USD vulnerable to slide further towards the 38.2% Fibo. level, around the $25.00 psychological mark, which should act as a pivotal point.

Silver 4-hour chart

Key levels to watch