Silver Price Analysis: XAG/USD seems poised to retest multi-month high, north of $24.00
|- Silver catches fresh bids on Tuesday and rallies to the $24.00 neighbourhood.
- The technical setup favours bulls and supports prospects for additional gains.
- A break below the $22.80 confluence is needed to negate the positive outlook.
Silver gains strong positive traction on Tuesday and rallies to a fresh daily high, back closer to the $24.00 mark in the last hour. The white metal, however, trims a part of its intraday gains and retreats to the mid-$23.00s heading into the North American session.
Given the recent bounce from a confluence comprising an ascending trend-line extending from November low and the 100-period SMA on the 4-hour chart, the bias seems tilted in favour of bulls. The positive outlook is reinforced by the fact that oscillators on the daily chart are holding comfortably in the bullish territory and have again started gaining traction on the 4-hour chart.
That said, RSI (14) on the 1-hour chart flashes slightly overbought conditions and holds back traders from positioning for any further gains. Nevertheless, the XAG/USD still seems poised to surpass the $24.00 mark and retest the multi-month top, around the $24.10-$24.15 area touched earlier this month. Some follow-through buying should pave the way for additional near-term gains.
On the flip side, the $23.30 horizontal support now seems to protect the immediate downside ahead of the $23.00 mark and the aforementioned confluence, currently around the $22.80 region. A convincing break below will negate the constructive set-up and prompt aggressive technical selling. The XAG/USD might then slide to the next relevant support near the $22.00 round figure.
Silver 4-hour chart
Key levels to watch
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