XAG/USD traded higher on Wednesday after hitting support slightly above the 14.60 support zone on Tuesday. Overall, the metal continues to oscillate between the 14.60 barrier and the resistance of 15.50, a range that’s been containing most of the price action since April 6th, and thus, we would consider the short-term outlook to be neutral for now.
In order to start examining the case for larger advances, we would like to see a decisive break above 15.50, the upper bound of the range. Such a move could initially aim for the 15.85 level, marked by the high of April 14th, the break of which may allow extensions towards the 16.55 zone, defined by the inside swing low of March 9th. If that zone is broken as well, then we could see the bulls targeting the peak of March 11th, at 17.10.
Shifting attention to our short-term oscillators, we see that the RSI lies above 50 and points higher, but the MACD lies very close to both its zero and trigger lines, Specifically it is fractionally below zero and slightly above its trigger line. Although the RSI suggest that more upside maybe in the work, the MACD incorporates the sideways activity and adds more credence to our choice of staying sidelined.
On the downside, a break below 14.60 may signal that the bulls have abandoned the battlefield, and thereby, give the greenlight to the bears for taking charge. We could then see a test near 14.25, where another break may set the stage for the 13.80 hurdle, which provided strong support between March 30th and April 1st. If the bears do not stop there either, then we could see them putting the 13.15 territory on their radars. That zone marks the low of March 24th.
