Silver's technical outlook faces a test: bullish and bearish tug-of-war within the parallel channel

Silver (XAG/USD) fluctuated around $36.20 during the US trading session, with the price still operating within a parallel channel that has been guiding the trend since early April. Although metal prices hit multi-year highs in June and triggered a strong rebound, they have recently entered a sideways correction phase, reflecting a dual effect of declining market participation and easing geopolitical tensions.

Complete Parallel Channel Structure, Key Bullish Defense Line

From the chart structure, silver shows a clear upward trajectory within the parallel channel, forming the typical higher highs and higher lows. Currently, the price consolidates near the midline of the channel, facing resistance around $36.50–$36.60, while $35.50 serves as an important support level on the downside.

It is noteworthy that buying interest has repeatedly appeared around $35.50, forming candlestick patterns with long lower shadows, indicating strong bullish defense at this level and giving this support a stronger technical significance. If the price breaks below the lower boundary of this parallel channel, it will expose a secondary support at $34.50.

Technical Indicators Signal Weakness

The 21-day EMA is currently at $35.79, closely aligned with the lower boundary of the parallel channel, providing dynamic support for the short-term structure. The Relative Strength Index (RSI) is near 57, suggesting moderate bullish momentum, but the strength is clearly insufficient, lacking strong upward confidence.

More concerning is the recent bearish crossover of the Moving Average Convergence Divergence (MACD), with the MACD line falling below the signal line. This indicates that upward momentum is significantly waning, and the histogram shows signs of convergence, increasing downside risk. Although MACD remains in positive territory, the warning signals are quite strong.

Two Main Directions for Trading Outlook

On the upside, bulls need to regain the $36.50 level to confirm a genuine rebound, paving the way for a move toward the $37.00–$37.50 range. This requires renewed buying interest to push the price through the resistance at the upper boundary of the parallel channel.

On the downside, caution is warranted. If silver closes below $35.50, it could face deeper corrections toward $34.50 and even $33.50. Such a breakdown would mark the rupture of the parallel channel structure and lead to a substantial shift in market sentiment. With current momentum weakening, the metal needs new positive catalysts to regain its upward trajectory.