- Silver attracted some dip-buying on the first day of a new trading week.
- Acceptance above the head & shoulders neckline favours bullish traders.
- A sustained move beyond the 61.8% Fibo. will reaffirm the positive bias.
Silver managed to find some support near the $23.00 round-figure mark on Friday and attracted some dip-buying on the first day of a new trading week. The commodity edged higher through the early European session and was last seen hovering near daily highs, around the $23.40-45 region.
Looking at the technical picture, last week's sustained move beyond the $23.15-20 barrier marked a bullish breakout through an inverted head and shoulders neckline. The emergence of fresh buying near the mentioned resistance breakpoint–turned–support, adds credence to the positive bias.
The constructive setup is reinforced by the fact that technical indicators on the daily chart have been gaining positive traction and are still far from being in the overbought territory. A sustained move beyond the 61.8% Fibonacci level of the $24.87-$21.42 downfall will reaffirm the outlook.
The XAG/USD might then aim to reclaim the $24.00 mark en-route the next relevant hurdle near the $24.25-30 region. The momentum could further get extended towards September monthly swing highs, near the $24.75-80 zone, before bulls eventually aim to reclaim the key $25.00 psychological mark.
On the flip side, the $23.20-$23.00 neckline resistance breakpoint should protect the immediate downside. The mentioned region coincides with 200-period SMA on the 4-hour chart and the 50% Fibo. level, which, in turn, should act as a strong near-term base for the XAG/USD.
A convincing break below will negate the bullish outlook and prompt aggressive technical selling. The XAG/USD might then accelerate the fall towards the 38.2% Fibo. level, around the $22.75-70 region before dropping further towards mid-$22.00s and the $22.25 region (23.6% Fibo.).
Silver 4-hour chart
Technical levels to watch
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