Silver eyes retesting the $26.12 6-month high

XAG/USD chart and technical analysis

Silver made significant gains and recovered 9.7% in the last two weeks. The price closed above the $25.0 and $25.27 resistance areas and will possibly reach the $26.12 6-month high in the coming days.

I am expecting the price will make a small correction and will retrace to the $24.96 support level before heading for new highs. I would wait for the price to drop to the $24.96 support level before entering a long trade.

The price is expected to make new highs in the coming weeks as the inverted H&S pattern has also appeared on the daily time frame which indicates the continuation of the bullish trend.

Silver fundamental analysis

Fundamentally, the two commodities gold and silver are in a steep bullish trend amid the weakening US dollar index. The rally of both commodities is likely to continue in the near future as gold almost reaches a new all-time high.

Moreover, the NFP data will be published on Friday and if the data turns out positive it will strengthen the USD and if the data turns out negative will weaken the USD index and the price of both gold and silver will surge to new highs.

Silver to the US dollar trade idea takeaways

•  The price of  XAG/USD will possibly retest the $26.12 6-month high in the coming weeks.
• The price will possibly retrace to the $26.96 support level before the surge.
• Multiple take-profit levels have been added to secure profit along the way.
• The risk-to-reward ratio on this trade is 1:4.9.
• The entry and stoploss prices have been placed at secure levels with the least probability of getting hit.
• Good luck!