Silver Price Analysis: XAG/USD bulls await a sustained move beyond 100-day SMA
|- Silver gained some positive traction on Monday, albeit lacked any follow-through buying.
- The set-up seems tilted in favour of bullish traders and supports prospects for further gains.
- Any meaningful pullback might still be seen as a buying opportunity near the $24.00 mark.
Silver edged higher on the first day of a new trading week, albeit struggled to capitalize on the move and remained capped near the 100-day SMA resistance around mid-$24.00s.
From a technical perspective, last week's sustained strength beyond a short-term descending trend-line resistance validated an inverted head and shoulders bullish breakout. A subsequent move and acceptance above the 38.2% Fibonacci level of the $28.75-$21.42 downfall supports prospects for additional gains.
The constructive set-up is reinforced by bullish technical indicators on the daily chart, which are still far from being in the overnight territory. Hence, some follow-through move beyond the $24.80-85 region, towards reclaiming the key $25.00 psychological mark, remains a distinct possibility.
The latter coincides with the 50% Fibo. level, which if cleared decisively should set the stage for an extension of the appreciating move. The XAG/USD could then climb to an intermediate hurdle near the $25.55-60 region before eventually darting towards the $26.00 mark, or the 61.8% Fibo. level.
On the flip side, any meaningful pullback might continue to attract some buying near the $24.00 mark, which now seems to act as a strong base for the XAG/USD. Failure to defend the mentioned support might prompt some technical selling and accelerate the corrective slide towards mid-$23.00s.
This is closely followed by the $23.20-15 confluence support, comprising of the descending trend-line resistance breakpoint and the 23.6% Fibo. level. A convincing break below will shift the bias in favour of bearish traders and expose the next relevant support near mid-$22.00s.
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.