Silver Continues to Face Broad Lateral ChannelOver the past five trading sessions, silver has managed to sustain a significant short-term bullish move, posting a steady gain of just over 4%. The current bullish bias has remained relatively consistent, as global risk perception stays elevated, mainly due to the ongoing back-and-forth of the trade war.
In his recent comments, President Trump announced that he might impose tariffs of up to 50% on European products if negotiations failed to progress quickly. Although a temporary truce has been reached following this statement, the European Union may continue preparing countermeasures in case no concrete agreement is achieved.
In this context, silver plays a crucial role, as XAG/USD is widely regarded as one of the quintessential safe-haven assets. As global economic risk perception—tied to the growing trade conflict—continues to rise, silver will likely attract enough capital to sustain steady buying pressure.
Additionally, it's important to note that the U.S. dollar is currently showing marked weakness against its major peers. If this weakness persists, buying pressure on silver could become even more relevant in upcoming sessions, provided these macroeconomic factors remain in place.
Broad Lateral Channel:
Since October 2024, silver has remained within a broad lateral channel between resistance at $34.43 and support at $30.38. Recently, a short-term bullish trend has begun to form, although buying momentum still seems insufficient to break out of this range. Therefore, this remains the most important technical pattern to monitor in the short term. As long as the top of the channel holds, it could serve as a key level triggering pullbacks in the current buying trend.
RSI:
Although the RSI line has started to rise steadily, it remains close to the neutral 50 level, suggesting equilibrium between buying and selling forces in the market. As long as the RSI continues to hover around this level, such neutrality may start to weigh on the current upward trend.
ADX:
The ADX line remains below the 20 mark, indicating that average volatility in recent movements is not decisive. This may signal that a phase of persistent neutrality is reemerging in the short term.
Key Levels to Watch:
$32.75 – Near-term resistance marked by the 50-period moving average. This level could serve as a barrier in case of downside corrections.
$31.45 – A critical support level, aligned with the 200-period moving average. Selling movements reaching this area could invalidate the ongoing bullish setup.
$34.43 – Main resistance, representing the upper boundary of the broad lateral range. Breakouts above this level would reinforce a stronger bullish bias.
Written by Julian Pineda, CFA – Market Analyst
