Silver Price Analysis: XAG/USD bulls have the upper hand, move beyond $26.00 mark awaited
|- Silver regained positive traction on Monday and climbed to a fresh multi-week high.
- Acceptance above the 61.8% Fibo. supports prospects for a further appreciating move.
- Sustained weakness below the $25.00 mark is needed to negate the positive outlook.
Silver attracted fresh buying on Monday and built on its recent bounce from the vicinity of the very important 200-day SMA. This marked the seventh day of a positive move in the previous eight and pushed spot prices to a six-week high, around the $25.90-$25.95 region during the first half of the European session.
From a technical perspective, the XAG/USD now seems to have found acceptance above the 61.8% Fibonacci retracement level of the $26.95-$23.97 downfall. Moreover, technical indicators on the daily chart have been gaining positive traction and are still far from being in overbought territory, which, in turn, favours bulls.
That said, traders are likely to wait for some follow-through buying beyond the $26.00 round-figure mark before confirming a bullish breakout and positioning for additional near-term gains. The XAG/USD might aim to test an intermediate resistance near the $26.40 area en-route the YTD peak, closer to the $27.00 mark.
On the flip side, any meaningful slide now seems to find decent support near the 50% Fibo. level, around the $25.50-$25.45 region. This is followed by the previous session's swing low, around the $25.25 area, ahead of the 38.2% Fibo. level, around the $25.00 psychological mark, which should act as a pivotal point.
A convincing break below would prompt some technical selling and drag the XAG/USD back towards the 23.6% Fibo. level, around the $24.65 region. The next relevant support is pegged near the $24.30 region, below which the downfall could get extended towards a technically significant 200-DMA, around the $24.00 mark.
Silver 4-hour chart
Key levels to watch
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