Silver Price Analysis: XAG/USD remains depressed below multi-month descending trend-line
|- Silver comes under renewed selling pressure and reverses Friday’s modest gains.
- Repeated failures near a descending trend-line warrant some caution for bulls.
- Strength beyond the $20.00 mark is needed to support prospects for further gains.
Silver struggles to capitalize on Friday's goodish rebound from a one-week low and meets with a fresh supply on the first day of a new week. The white metal maintains its offered tone through the first half of the European session and is currently placed near the daily low, around the $19.30 region.
From a technical perspective, the XAG/USD, so far, has been struggling to make it through a descending trend-line resistance extending from the May swing high. Repeated failures near the said barrier suggest that the recent recovery from over a two-year low, the $17.55 area might have already run out of steam.
That said, technical indicators on the daily chart are holding with a mild positive bias and support prospects for the emergence of some dip-buying at lower levels. Hence, it will be prudent to wait for some follow-through selling below the $19.00 mark before positioning for any further depreciating move.
The next relevant support is pegged near Friday's swing low, around the $18.80-$18.75 region, which if broken decisively will shift the near-term bias back in favour of bearish traders. The XAG/USD might then accelerate the fall to the $18.45-$18.40 intermediate support en route to the $18.00 round-figure mark.
On the flip side, the aforementioned descending trend-line, currently around the $19.85 region, might continue to act as an immediate strong barrier. This is closely followed by the $20.00 psychological mark. A sustained strength beyond the latter is needed to confirm a near-term bullish breakout and additional gains.
The subsequent move up has the potential to lift the XAG/USD to the 100-day SMA, near the $20.30 area. The momentum could further get extended towards the $20.50 region, above which spot prices could aim to reclaim the $21.00 round-figure mark before eventually climbing further towards the $21.50 area.
Silver daily chart
Key levels to watch
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