Silver Price Analysis: XAG/USD corrects further from over two-month top, bullish bias remains

Silver edges lower and retreat further from over a two-month peak touched on Friday.
The technical setup supports prospects for the emergence of dip-buying at lower levels.
A sustained move beyond a descending trend line is needed to reaffirm the positive bias.

Haresh Menghani FXStreet

Silver (XAG/USD) extends Friday's retracement slide from the $24.15 region, or its highest level since September 4 and remains under some selling pressure on the first day of a new week. The white metal remains depressed through the early part of the European session and currently trades around the $23.65-$23.60 area, down nearly 0.50% for the day.

From a technical perspective, last week's breakout momentum through the very important 200-day Simple Moving Average (SMA) falters near a resistance marked by a downward sloping trend line extending from the May monthly swing high. The said barrier, currently around the $24.00 round figure, should now act as a key pivotal point for the XAG/USD and help determine the next leg of a directional move.

Oscillators on the daily chart, meanwhile, are holding in the positive territory and are still far from being in the overbought zone. This, in turn, suggests that the path of least resistance for the XAG/USD is to the upside and supports prospects for the emergence of some dip-buying at lower levels. Bulls, however, need to wait for acceptance above the $24.00 mark before placing fresh bets and positioning for further gains.

The XAG/USD might then aim to surpass the $24.20-$24.25 intermediate resistance and make a fresh attempt to conquer the $25.00 psychological mark. Some follow-through buying beyond the $25.15-$25.20 region should set the stage for a more towards reclaiming the $26.00 round figure for the first time since May.

On the flip side, the 200-day SMA, currently pegged near the $23.30 region, now seems to protect the immediate downside. Any further decline could be seen as a buying opportunity and remain limited near the $23.00 mark. That said, a convincing break below the latter might prompt aggressive technical selling and drag the XAG/USD further towards the $22.35-$22.30 zone en route to the $22.00 mark.

Silver daily chart

Technical levels to watch

XAG/USD

Overview
Today last price	23.63
Today Daily Change	-0.10
Today Daily Change %	-0.42
Today daily open	23.73

Trends
Daily SMA20	22.96
Daily SMA50	22.69
Daily SMA100	23.22
Daily SMA200	23.28

Levels
Previous Daily High	24.15
Previous Daily Low	23.66
Previous Weekly High	24.15
Previous Weekly Low	21.88
Previous Monthly High	23.7
Previous Monthly Low	20.68
Daily Fibonacci 38.2%	23.85
Daily Fibonacci 61.8%	23.96
Daily Pivot Point S1	23.55
Daily Pivot Point S2	23.37
Daily Pivot Point S3	23.07
Daily Pivot Point R1	24.03
Daily Pivot Point R2	24.33
Daily Pivot Point R3	24.51

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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