Silver Price Analysis: XAG/USD bulls have the upper hand above $24.20-15 confluence
|- Silver attracted some dip-buying on Tuesday, though remained below two-week tops.
- The bias favours bulls and supports prospects for a move towards the $24.80-85 area.
Silver reversed modest intraday losses and was last seen hovering near daily tops, just below mid-$24.00s, or two-week tops touched in the previous day.
Given the overnight sustained move beyond the $24.20-15 confluence barrier, the emergence of some dip-buying on Tuesday favours bullish traders. The outlook is reinforced by the fact that technical indicators on the hourly/daily charts are holding comfortably in the bullish territory and are still far from being in the overbought zone.
Hence, a subsequent move towards testing October monthly swing highs, around the $24.80-85 region, remains a distinct possibility. This is followed by the key $25.00 psychological mark. The latter coincides with the 50% Fibonacci level of the $28.75-$21.42 downfall, which if cleared decisively will set the stage for additional near-term gains.
The XAG/USD might then accelerate the momentum towards the next relevant hurdle near the $25.55-60 region before eventually aiming to test the 61.8% Fibo. level, around the $26.00 round-figure mark.
On the flip side, the $24.20-15 resistance breakpoint – comprising 100-day SMA and the 38.2% Fibo. levels – now seem to protect the immediate downside ahead of the $24.00 mark. Any subsequent fall might still be seen as a buying opportunity near the $23.70 area, which should help limit the downside near the $23.50 support zone.
Failure to defend the mentioned support levels would turn the XAG/USD vulnerable to retest strong support around the $23.00 mark. Some follow-through selling could shift the bias in favour of bearish traders and expose the next relevant support near mid-$22.00s. The downward trajectory could get extended towards YTD lows, around the $21.40 area touched in September.
Silver daily chart
Technical levels to watch
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