Silver has been plunging since early May, generating a clear structure of lower highs and lower lows. Nevertheless, in the last couple of sessions the metal has gained some traction as negative momentum seems to be fading.
The cautiously positive near-term picture is reflected by the momentum indicators. The stochastic oscillator is marching higher after posting a bullish crossover, while the RSI is sloping upwards slightly below its 50-neutral mark. However, in the last two months, the price has been trading below the Ichimoku cloud, endorsing the metal’s long-term bearish outlook.
Should the positive momentum intensify further, the pair might encounter strong resistance at the recent high of 23.40. Conquering this obstacle, the price could ascend towards 24.80 or even higher to challenge the 25.38 region. Piercing through these resistance levels, the spotlight could turn to the 26.00 psychological mark.
On the flipside, if the bears manage to regain the upper hand, 21.95 could be the first support point for the price. Falling beneath this hurdle, the 17-month low of 21.40 may appear on the radar, which held strong twice in the last four months. A break below that level would signal the resumption of the long-term downtrend, sending the price to test the 21.00 psychological mark.
In brief, the long-term picture for silver remains negative even though bearish pressures appear to be waning. However, a profound cross above 25.38 could alter the medium-term outlook back to positive.
