Silver Price Forecast: XAG/USD tests rising channel support, momentum indicators flash caution

• Silver trades flat-to-lower as safe-haven flows ease on Iran-Israel ceasefire news.
• XAG/USD trades near $35.75, down 0.46%, trapped in Tuesday's range.
• Price tests key trendline and Bollinger Band support, breakdown may expose $34.00 next.

Silver (XAG/USD) is showing muted price action on Wednesday, slipping modestly lower but staying within Tuesday's range. At the time of writing, the metal is trading around $35.75 during the American session, down roughly 0.46% on the day. The subdued movement reflects fading safe-haven demand, as signs of easing geopolitical tensions -- particularly the truce between Iran and Israel -- have cooled the recent risk premium that helped drive Silver to multi-year highs.

Silver is showing early signs of technical fatigue after a strong multi-week uptrend that saw the metal climb from sub-$30 levels to 13-year highs near $37.00. One of the key red flags came from a bearish divergence between price action and the Relative Strength Index (RSI). While spot Silver pushed to fresh multi-year highs last week, the RSI peaked earlier and has since trended lower. With RSI now easing toward 56, the bullish momentum appears to be moderating, inviting cautious profit-taking from short-term traders

Today's price action sees XAG/USD trading near $35.75, modestly lower on the day, as it currently tests the lower boundary of a well-defined ascending channel. This structure has underpinned bullish momentum since mid-April. This support zone aligns closely with the middle Bollinger Band (20-day SMA), currently around $35.71. A decisive daily close below this confluence area could be the first concrete signal that bulls are losing grip.

The Bollinger Bands have started to contract after widening sharply during Silver's rally. Such narrowing typically precedes a significant directional move. If the lower channel support around $35.60-$35.70 gives way, it could open the door toward deeper retracements near $34.00.

Volatility, as captured by the Average True Range (ATR 14), has also tapered off to 0.78, suggesting that the explosive moves of early June are giving way to more measured price action. This could mean that the market is entering a consolidation phase or preparing for a breakout reversal.

That said, the broader trend remains bullish unless a confirmed breakdown occurs. Traders will be watching whether bulls can defend this technical inflection zone and bounce back toward $37.00, or if the weight of profit-taking and reduced safe-haven flows forces a steeper correction.