• Silver's pullback from the $55.00 area remains contained above $53.50
• Investors' fears about the Sino-US trade tensions and hopes of further Fed easing support precious metals
• XAG/USD maintains its bullish trend intact with supports at $5340 and $51.25

Silver (XAG/USD) rally was capped a few cents below the $55.00 level on Wednesday, pulling lower on profit-taking. However, downside attempts remain limited amid cautious markets, which is keeping the precious metal supported above the $52.50 area, not far from four-week highs.

The fundamental context remains supportive for precious metals, as escalating trade tensions between the US and China continue to fuel safe-haven demand. Beyond that, the market is practically fully pricing a rate cut by the Fed in late October, which is adding bearish pressure on the US Dollar.

Technical analysis: Consolidating gains within a broader bullish trend

Silver is in a period of consoñlidatiion after the last bullish run to the $55.00 area. The 4-hour RSI is showing some bearish divergence, but the pair appears unlikely to undergo a significant correction unless the fundamental background undergoes a substantial change.

To the downside, support levels at 52.43 (Intraday low) and at the bottom of the ascending channel, now around Wednesday’s low in the $51.25 area, are likely to hold bears. Below here, negative pressure would increase, aiming for the October 14 low, at $50.30.

Upside attempts are likely to meet resistance at the channel top, in the area of $54,00 and Wednesday’s high, at $54.85. Further up, the 161.8% Fibonacci extension of the October 9-14 rally, at $56.65 emerges as a plausible target.