Silver Price Forecast: XAG/USD climbs for second day, eyes breakout above triangle barrier

• Silver extends rebound for second straight day, trading near $38.00 after bouncing from $37.50 during the European session.
• Technically, XAG/USD trades within a symmetrical triangle, with immediate resistance at $38.20 and key support at $37.50.
• Market focus shifts to Fed Chair Jerome Powell's speech at Jackson Hole on Friday.

Silver (XAG/USD) extends its rebound for a second consecutive day on Thursday, although upside could be limited by a stronger US Dollar (USD) and firm Treasury yields. At the time of writing, the metal is trading around $38.20, recovering from an intraday low near $37.50 touched during the European session.

The US Dollar Index (DXY) climbs to a fresh one-week high near 98.50 after upbeat S&P Purchasing Managers Index (PMI) data reinforces optimism about the growth outlook. At the same time, weekly labor data shows US Initial Jobless Claims rising to an 8-week high, adding to signs of a cooling labor market. The mixed data prompts traders to scale back expectations for aggressive Fed easing, with the CME FedWatch Tool showing a 75% probability of a September rate cut, down from 81% earlier in the day. Market focus now shifts to Fed Chair Jerome Powell's speech at the Jackson Hole Symposium on Friday, which may provide clarity on the policy outlook.

From a technical standpoint, Silver trades within a symmetrical triangle formation on the 4-hour chart. The bounce off the $37.50 support brings prices back above the 100-period Simple Moving Average (SMA) at $37.75, which now acts as immediate support.

A sustained move above the $38.20 psychological barrier, aligned with the triangle's upper boundary, could trigger a bullish breakout and expose the next resistance levels at $38.74 (August 14 high) and $39.53 (multi-year peak).

Momentum signals show signs of improvement. The Relative Strength Index (RSI) has risen to 59, pointing to strengthening bullish momentum. The Moving Average Convergence Divergence (MACD) has crossed into positive territory, reinforcing the case for a near-term upside bias. Meanwhile, the Average Directional Index (ADX) stands at 24.96, indicating that overall trend strength remains moderate but is gradually improving.

On the downside, failure to clear $38.20 may keep XAG/USD range-bound. Immediate support lies at the 100-SMA, followed by $37.50 and the key $37.00 level. A break below would risk a bearish breakdown toward $36.50.