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• Silver reverses an intraday dip to a fresh multi-month low touched earlier this Thursday.
• The technical setup remains tilted in favor of bearish traders and warrants some caution.
• The intraday positive move is more likely to confront stiff resistance near the $27.50 area.

Silver (XAG/USD) stages a goodish recovery from the $26.45 area, or a three-month low touched during the Asian session on Thursday and for now, seems to have snapped a three-day losing streak. The white metal currently trades just below the $27.00 mark, up over 1.20% for the day, though any meaningful appreciating move still seems elusive.

Against the backdrop of the recent breakdown through the 100-day Simple Moving Average (SMA), the overnight close below the 50% Fibonacci retracement level of the February-July positive move could be seen as a fresh trigger for bearish traders. Moreover, technical indicators on the daily chart are holding deep in negative territory and are still away from being in the oversold zone. This, in turn, validates the negative outlook and suggests that the path of least resistance for the XAG/USD is to the downside.

Hence, any subsequent move up is more likely to attract fresh supply near the $27.50 horizontal resistance. A sustained strength beyond, however, might trigger a short-covering rally and lift the XAG/USD beyond the $28.00 mark, to the $28.20 hurdle. The momentum could extend further, though is likely to remain capped near the 100-day SMA support breakpoint, near the $28.70 region. This is followed by the $29.00 round figure, which if cleared will shift the near-term bias back in favor of bullish traders. 

On the flip side, the $26.50-$26.45 region, or a multi-month low, now seems to have emerged as an immediate strong support. Bearish traders need to wait for some follow-through selling below the said area before positioning for a further depreciating move to the May monthly swing low, around the $26.00 mark. The next relevant support is pegged near the $25.60 horizontal zone, below which the XAG/USD could fall to the $25.00 psychological mark before eventually dropping to the $24.40-$24.30 support zone.

Silver daily chart
 

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