Silver Price Analysis: XAG/USD bulls need to wait for move beyond $23.30-35 confluence hurdle

Silver regains positive traction on Thursday and climbs back to the $23.00 round-figure mark.
The technical setup seems tilted in favour of bulls and supports prospects for additional gain.
A convincing break below the 38.2% Fibo. level is needed to negate the constructive outlook.

Haresh Menghani FXStreet

Silver attracts fresh buying on Thursday following the previous day's sharp retracement slide from the $23.30-$23.35 area, or a near three-week high and extends its steady ascent through the early European session. The white metal climbs back closer to the $23.00 mark and seems poised to prolong its recent goodish recovery from a seven-month low touched on October 3.

From a technical perspective, acceptance above the 50% Fibonacci retracement level of the August-October downfall validates the constructive outlook for the XAG/USD. Furthermore, oscillators on the daily chart have just started gaining positive traction and support prospects for a further appreciating move. That said, the overnight failure near the $23.30-$23.35 confluence hurdle – comprising the 100-day and the 200-day Simple Moving Averages (SMAs) and the 61.8% Fibo. level – warrants some caution.

Hence, it will be prudent to wait for a sustained break through the aforementioned barrier before positioning for any further gains. The XAG/USD might then accelerate the positive move towards the next relevant resistance near the $23.75-$23.80 region (September 22 high) and then aim towards reclaiming the $24.00 round figure for the first time since early September. The momentum could get extended further towards the $24.30-$24.35 resistance zone.

On the flip side, the 50% Fibo. level, around the $22.85 region, now seems to protect the immediate downside ahead of the overnight swing low, around the $22.70-$22.65 area. Some follow-through selling might expose the weekly trough, around the $22.40-$22.35 zone. The latter nears the 38.2% Fibo. level and should act as a key pivotal point. A convincing break below might shift the near-term bias back in favour of bearish traders and prompt aggressive technical selling around the XAG/USD.

The subsequent downfall will make the commodity vulnerable to weaken further below the $22.00 mark, towards the 23.6% Fibo. level, around the $21.75 area. Failure to defend the said support levels has the potential to drag the XAG/USD further towards the $21.35-$21.30 intermediate support en route to the $21.00 mark and back towards retesting a seven-month low, around the $20.70-$20.65 zone, or a seven-month low touched on October 3.

Silver daily chart

Technical levels to watch

XAG/USD

Overview
Today last price	23.02
Today Daily Change	0.18
Today Daily Change %	0.79
Today daily open	22.84

Trends
Daily SMA20	22.23
Daily SMA50	22.91
Daily SMA100	23.31
Daily SMA200	23.33

Levels
Previous Daily High	23.32
Previous Daily Low	22.68
Previous Weekly High	22.82
Previous Weekly Low	21.57
Previous Monthly High	24.82
Previous Monthly Low	22.12
Daily Fibonacci 38.2%	23.08
Daily Fibonacci 61.8%	22.93
Daily Pivot Point S1	22.58
Daily Pivot Point S2	22.31
Daily Pivot Point S3	21.94
Daily Pivot Point R1	23.22
Daily Pivot Point R2	23.59
Daily Pivot Point R3	23.85

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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