Silver Price Analysis: XAG/USD climbs back above $23.00, upside potential seems limited

Silver gains positive traction and snaps an eight-day losing streak to over a two-week low.
The technical setup supports prospects for the emergence of fresh selling at higher levels.
Bears might wait for a fall below the $22.85-80 region before positioning for further decline.

Haresh Menghani FXStreet

Silver attracts some buyers on the first day of a new week, snapping an eight-day losing streak, and climbs back above the $23.00 round-figure mark during the Asian session. The white metal, however, remains well within the striking distance of a two-and-half-week low, around the $22.85-$22.80 region retested on Friday, and still seems vulnerable to slide further.

The negative outlook is reinforced by the fact that oscillators on the daily chart have been gaining negative traction and are away from being in the oversold zone. Moreover, the Relative Strength Index (RSI) on the 4-hour chart has also recovered from the oversold territory. This, in turn, suggests that the path of least resistance for the XAG/USD remains to the downside.

Hence, any subsequent move up might still be seen as a selling opportunity and remain capped near the very important 200-day Simple Moving Average (SMA), currently pegged near the $23.45-$23.50 area. This is followed by the 100-day SMA barrier, around the $23.80 region, and the $24.00 mark, which if cleared decisively will negate the negative outlook for the XAG/USD.

The subsequent short-covering move has the potential to lift the white metal beyond the $24.30-$24.35 supply zone, towards reclaiming the $25.00 psychological mark. The latter represents the August monthly swing high and should act as a pivotal point. A sustained strength beyond will be seen as a fresh trigger for bullish traders and pave the way for a further appreciating move.

On the flip side, bearish traders need to wait for some follow-through selling below the $22.85-$22.80 area before placing fresh bets. The XAG/USD might then accelerate the fall below the $22.65-$22.60 support, towards challenging a strong horizontal support near the $22.20-$22.10 zone. This is followed by the $22.00 mark, which if broken will confirm a fresh breakdown.

Silver daily chart

Technical levels to watch

XAG/USD

Overview
Today last price	23.04
Today Daily Change	0.11
Today Daily Change %	0.48
Today daily open	22.93

Trends
Daily SMA20	23.56
Daily SMA50	23.74
Daily SMA100	23.84
Daily SMA200	23.47

Levels
Previous Daily High	23.18
Previous Daily Low	22.86
Previous Weekly High	24.3
Previous Weekly Low	22.83
Previous Monthly High	25.02
Previous Monthly Low	22.23
Daily Fibonacci 38.2%	22.98
Daily Fibonacci 61.8%	23.05
Daily Pivot Point S1	22.8
Daily Pivot Point S2	22.67
Daily Pivot Point S3	22.48
Daily Pivot Point R1	23.12
Daily Pivot Point R2	23.3
Daily Pivot Point R3	23.44

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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