Silver Price Analysis: XAG/USD bulls await breakout through descending trend-line hurdle
|- Silver once again fails ahead of a multi-month-old descending trend-line resistance.
- The technical set-up favours bulls and supports prospects for an eventual breakout.
- Weakness below the $18.80-75 region is needed to negate the near-term positive bias.
Silver meets with a fresh supply on Tuesday and remains on the defensive through the early European session. The white metal is currently trading near the daily low, just below the mid-$19.00s.
From a technical perspective, the XAG/USD has been oscillating in a familiar band over the past week or so. The range-bound price action points to indecision among traders over the next leg of a directional move. Moreover, the upside remains capped near a descending trend-line resistance extending from the May swing high.
The said barrier around the $19.75 area should act as a pivotal point and help determine the near-term trajectory for the XAG/USD. A convincing breakthrough will be seen as a fresh trigger for bulls and set the stage for an extension of the recent recovery from over a two-year low, the $17.55 region touched earlier this month.
Given that oscillators on the daily chart are holding with a mild positive bias, the XAG/USD might then aim to surpass the $20.00 psychological mark and test the 100-day SMA, near the $20.25 area. Some follow-through has the potential to lift spot prices beyond the $20.50 intermediate hurdle, towards the $21.00 round-figure mark.
On the flip side, the $19.00 mark might protect the immediate downside ahead of the $18.80-$18.75 zone, which if broken decisively will shift the near-term bias back in favour of bearish traders. The XAG/USD might then accelerate the downfall to the $18.45-$18.40 support before eventually dropping to the $18.00 round figure.
Silver daily chart
Key levels to watch
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