• Silver oscillates in a narrow trading band through the first half of the European session.
• The formation of an ascending channel points to a well-established short-term up trend.
• A convincing break below the 100-hour SMA is needed to negate the constructive setup. 

Silver lacks any firm direction on Wednesday and seesaws between tepid gains/minor losses through the first half of the European session. The XAG/USD is currently placed around the $23.70 area, well below its highest level since late April touched on Tuesday.

From a technical perspective, the recent move-up witnessed over the past week or so has been along an upward-sloping channel. This points to a well-established short-term bullish trend. Furthermore, oscillators on hourly charts have eased from the overbought territory and support prospects for further gains. That said, RSI (14) on the daily chart remains on the verge of breaking above the 70 mark and warrants some caution for bulls.

Nevertheless, any subsequent downtick is likely to find decent support near the lower boundary of the aforementioned trend channel, currently around the mid-$23.00s. This is closely followed by the 100-hour SMA, near the $23.30-$23.25 region, which if broken decisively will negate the positive outlook and shift the near-term bias in favour of bearish traders. The XAG/USD might then accelerate the fall towards the $23.00 round-figure mark.

The next relevant support is pegged just below the $23.00 mark, which coincides with the 200-hour SMA. Some follow-through selling will expose the $22.55 support zone before the XAG/USD eventually drops to the $22.00 round figure. The latter should act as a key pivotal point and a strong base for spot prices, at least for the time being.

On the flip side, the $24.00 mark now becomes immediate hurdle, above which the XAG/USD is likely to surpass the multi-month top, around the $24.15 area, and test the ascending channel resistance. A sustained strength beyond the said barrier, currently around the $24.35 region, will be seen as a fresh trigger for bullish traders and allow the white metal to reclaim the $25.00 psychological mark.

Silver 1-hour chart

Key levels to watch