Silver Price Analysis: XAG/USD bulls looking to seize control, await a move beyond $23.00
- Silver gained strong positive traction and shot to the $23.00 mark, or a multi-day high on Monday.
- Technical indicators on the daily chart warrant some caution before placing aggressive bullish bets.
- A convincing break through the $23.40-$23.45 area is needed to support prospects for further gains.
Silver built on Friday's rebound from the post-NFP low to the $22.00 neighbourhood, or a near one-month low, and gained strong positive traction on the first day of a new week. The intraday positive move pushed spot prices back closer to the $23.00 round-figure mark during the early North American session.
From a technical perspective, any subsequent move up beyond the mentioned handle might confront some resistance near the 100-day SMA, currently around the $23.20 area. This is followed by the $23.40-$23.45 horizontal barrier, which should act as a pivotal point and help determine the near-term trend for the XAG/USD.
Technical indicators on the daily chart – though have been recovering from lower levels – are yet to confirm a bullish bias for the XAG/USD. This makes it prudent to wait for a strong follow-through buying before confirming that the recent sharp rejection slide from the very important 200-day SMA has run its course.
A convincing breakthrough the said barriers will negate any bearish bias and trigger a fresh bout of a short-covering move. This should allow the XAG/USD to surpass the $24.00 round-figure mark and climb further towards challenging the YTD high, around the $24.70 region touched on January 20.
On the flip side, the $22.65 area now seems to protect the immediate downside ahead of the $22.40 region, which if broken would expose the $22.00 round figure. Sustained weakness below should pave the way for a further decline and drag the XAG/USD towards challenging the double-bottom support, around the $21.40 zone.
Silver daily chart
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Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
