XAG/USD traded lower yesterday, but rebounded somewhat today, staying above the upside support line drawn from the low of March 18th. On top of that, on Monday, the white metal escaped – to the upside – the sideways range that had been in place since March 24th, between 13.85 and 14.60, confirming a higher high at 15.50. Having all this in mind, we would consider the short-term outlook to be positive for now.
A clear and decisive break above 15.50 would confirm another forthcoming higher high, but the move that may open the path to decent bullish extensions is overcoming the 15.84 area, marked by the high of March 13th. This may set the stage for the 16.43 hurdle, marked by the inside swing lows of February 28th and March 2nd, the break of which may encourage the bulls to climb towards the peak of March 10th, at 17.20, or the high of March 9th, at 17.60.
Turning to our short-term oscillators, we see that the RSI, already above 50, has rebounded again, but the MACD, although positive, lies slightly below its trigger line and points down. Both indicators detect upside speed, but the fact that the MACD remains below its trigger line is the reason we prefer to wait for a move above 15.84 before we get confident that the metal may accelerate strongly to the upside.
On the downside, we would like to see a clear close below 13.85 before we start examining the case of a reversal to the downside. That zone provided strong support between March 30th and April 2nd, and thus, its break may signal that the bears have gained the upper hand. We may then experience declines towards the 13.00 zone, marked by the inside swing high of March 20th, where another dip may extend the fall towards the low of the day after, at around 12.28.
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