Silver Price Analysis: XAG/USD bulls now await a move beyond $23.35-40 confluence hurdle
|- Silver scales higher for the fifth straight day and sticks to gains near a two-week high.
- The intraday technical setup favours bulls and supports prospects for additional gains.
- A sustained break below the $22.70-65 area is needed to negate the positive outlook.
Silver attracts some buying for the fifth successive day on Thursday and sticks to its modest intraday gains through the early part of the European session. The white metal currently trades around the $23.20-$23.25 region, up nearly 0.50% for the day, and remains well within the striking distance of over a two-week high touched on Wednesday.
From a technical perspective, the recent recovery from the vicinity of the $22.00 mark, or the multi-month low touched in June, has been along an upward-sloping channel. Adding to this, the overnight sustained strength beyond the $23.00 round figure, which coincided with the 38.2% Fibonacci retracement level of the downfall from the June swing high, was seen as a fresh trigger for bullish traders. This, along with positive oscillators on hourly charts, supports prospects for a further appreciating move for the XAG/USD.
That said, technical indicators on the daily chart are yet to confirm a positive outlook and make it prudent to wait for some follow-through buying beyond the $23.35-$23.40 confluence before placing fresh bullish bets. The said barrier comprises the 200-period Simple Moving Average (SMA) on the 4-hour chart, the top end of the aforementioned channel and the 50% Fibo. level. A convincing breakthrough should lift the XAG/USD towards the $23.60 area, or the 61.8% Fibo., en route to the $24.00 mark and the $24.25 resistance.
On the flip side, the $23.00 resistance breakpoint (38.2% Fibo.) might now protect the immediate downside. Any further slide is more likely to attract some buying and remain limited near the $22.65-$22.70 area, or the 23.6% Fibo. level, which should act as a pivotal point for the XAG/USD. Failure to defend the said support levels could make the XAG/USD vulnerable to slide back towards challenging the $22.00 mark.
Some follow-through selling below the $22.00 mark should pave the way for deeper losses towards the $21.70-$21.65 zone en route to the $21.25 support before the XAG/USD eventually drops to the $21.00 round-figure mark.
Silver 4-hour chart
Key levels to watch
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