Silver Price Analysis: XAG/USD remains below 200-day SMA/61.8% Fibo. confluence
|- Silver climbs to a one-week high on Monday, albeit struggles to capitalize on the move up.
- The technical setup seems tilted in favour of bulls and supports prospects for further gains.
- A sustained move beyond the $23.30-40 confluence is needed to reaffirm the positive bias.
Silver (XAG/USD) gains some positive traction for the second successive day and touches a one-week high, around the $23.20 area during the Asian session on Monday. The white metal, however, struggles to capitalize on the move and remains below the $23.30-$23.40 confluence, comprising the 200-day Simple Moving Average (SMA) and the 61.8% Fibonacci retracement level of the August-October downfall.
The aforementioned hurdle is followed by the $23.70-$23.75 supply zone, which should now act as a key pivotal point. Technical indicators on the daily chart, meanwhile, have been gaining positive traction and are still far from being in the overbought zone. Hence, a sustained strength beyond the said barriers will be seen as a fresh trigger for the XAG/USD bulls and pave the way for some meaningful appreciating move.
The subsequent move up could get extended beyond the $24.00 round-figure mark, towards testing the next relevant resistance near the $24.20 region. Some follow-through buying will confirm a fresh breakout and allow the XAG/USD to make a fresh attempt towards conquering the $25.00 psychological mark.
On the flip side, slide back below the $23.00 round figure now seems to find some support near the $22.85 region, or the 50% Fibo. level. The next relevant support is pegged near last week's swing low, around the $22.55 area, ahead of the 38.2% Fibo. level, around the $22.35-$22.30 static support. Failure to defend the said support levels might shift the bias in favour of the XAG/USD bears.
The downward trajectory could then get extended further towards the $22.00 round-figure mark, en route to the $21.70 region, representing 23.6% Fibo. level. Some follow-through selling could make the XAG/USD vulnerable to accelerate the fall further towards the $21.00 level before eventually dropping to the $20.70-$20.65 region, or its lowest level since March touched earlier this month.
Silver daily chart
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.