Silver Price Analysis: XAG/USD pares intraday losses, bulls retain control above 50% Fibo. level
|- Silver finds support near 50% Fibo. and stalls its modest intraday slide from a multi-week peak.
- The technical setup favours bullish traders and supports prospects for further near-term gains.
- A convincing break below the $21.50 area negates the positive outlook for the white metal.
Silver retreats from its highest level since February 03 touched on the first day of a new week and remains on the defensive through the early European session. The white metal, however, manages to recover a part of its intraday losses and seems poised to prolong its recent appreciating move witnessed over the past two weeks or so.
Last week's sustained breakout through the $21.65-$21.70 confluence resistance was seen as a fresh trigger for bullish traders. Furthermore, a subsequent move and acceptance above the 50% Fibonacci retracement level of the recent sharp pullback from a multi-month peak support prospects for additional gains. Adding to this, bullish oscillators on 4-hour and daily charts suggest that the path of least resistance for the XAG/USD is to the upside.
Hence, some follow-through strength towards testing the 61.8% Fibo. level, around the $22.80-$22.85 region, looks like a distinct possibility. The momentum could get extended beyond the $23.00 mark, towards testing the next relevant hurdle near the $23.25-$23.35 zone en route to the $24.00 round-figure mark. Bullish traders might eventually aim to challenge the multi-month top, around the $24.65 zone touched in early February.
On the flip side, the 50% Fibo. level, around the $22.25 region, helps limit the intraday downtick and should now act as a pivotal point. Any further decline is likely to attract fresh buying near the $22.00 mark and remains limited near the $21.65-$21.70 confluence resistance breakpoint. The latter comprises the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibo. level, which if broken might negate the positive bias.
Some follow-through selling below the $21.50 area could expose the $21.00 mark, representing the 23.6% Fibo. level. The XAG/USD might then turn vulnerable to accelerate the slide towards the $20.55-$20.50 intermediate support en route to the $20.00 psychological mark. The downward trajectory could get extended further and drag spot prices to the next relevant support near the $19.60 region.
Silver 4-hour chart
Key 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.