Silver Price Analysis: XAG/USD bulls looking to seize control near $22.00 mark

Silver attracted fresh buying on Monday and inched back closer to last week's swing high, albeit struggled to capitalize on the move beyond the $22.00 round-figure mark.

From a technical perspective, the emergence of dip-buying and acceptance above the 23.6% Fibonacci retracement level of the $28.22-$20.46 downfall favours bullish traders. Moreover, oscillators on hourly charts have been gaining positive traction and add credence to the constructive outlook.

That said, technical indicators on the daily chart - though have been recovering from the negative territory - are yet to confirm a bullish bias. This makes it prudent to wait for a subsequent strength beyond the 100-period SMA on the 4-hour chart before positioning for any further gains.

The XAG/USD might then surpass an intermediate hurdle near the $22.30 area and accelerate the momentum towards testing the next relevant hurdle near the $22.65 zone. The latter coincides with the 38.2% Fibo. level, which if cleared would suggest that spot prices have bottomed out.

On the flip side, weakness below the 23.6% Fibo. level resistance breakpoint now seems to find support near Friday's swing low, around the $21.60 area. Any further pullback is more likely to find decent support near the $21.25-$21.20 area, which should act as a strong base for the XAG/USD.

A convincing break below would negate prospects for any further positive move and prompt aggressive technical selling. The XAG/USD would then turn vulnerable to weakening further below the $21.00 mark and aim to challenge the YTD low, around the $20.45 area touched earlier this month.

Silver 4-hour chart

Key levels to watch