Silver Price Analysis: XAG/USD climbs back closer to 100-day SMA support breakpoint


  • Silver stages a solid rebound from over a two-month low touched this Friday.
  • The setup warrants some caution before positioning for any further recovery.
  • A sustained move beyond the $24.00 mark could negate the bearish outlook.

Silver gains strong positive traction on Friday and snaps a four-day losing streak to the $22.70-$22.65 area, or over a two-month low touched earlier today. The white metal maintains its bid tone through the early North American session and currently trades around the $23.20-$23.25 zone, up over 2% for the day.

A slightly oversold Relative Strength Index (RSI) on the daily chart turns out to be a key factor that prompts aggressive short-covering around the XAG/USD. That said, this week's convincing break through the 100-day Simple Moving Average (SMA) support and the overnight slide below the 50% Fibonacci retracement level of the March-May rally favour bearish traders. This, in turn, suggests that any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

The 100-day SMA support breakpoint, currently pegged around the $23.35 region, is likely to act as an immediate hurdle. This is followed by 38.2% Fibo. level, near the $23.75 zone, above which the XAG/USD could climb to the $24.00 mark. The latter should act as a pivotal point, which if cleared decisively might trigger a fresh wave of a short-covering move and lift the commodity further beyond the $24.20-$24.25 hurdle. The recovery momentum could get extended towards the $24.50-$24.60 strong support breakpoint.

On the flip side, the monthly low, around the $22.70-$22.65 region, now seems to protect the immediate downside ahead of the 61.8% Fibo. level, near the $22.25 area. Some follow-through selling, leading to a subsequent slide below the $22.00 mark should pave the way for an extension of the recent downfall from over a one-year top touched earlier this month. The XAG/USD might then accelerate the fall towards the $21.55-$21.50 intermediate support before eventually dropping to the $21.00 round-figure mark.

Silver daily chart

fxsoriginal

Key levels to watch

XAG/USD

Overview
Today last price 23.2
Today Daily Change 0.46
Today Daily Change % 2.02
Today daily open 22.74
 
Trends
Daily SMA20 24.47
Daily SMA50 24.34
Daily SMA100 23.36
Daily SMA200 22
 
Levels
Previous Daily High 23.15
Previous Daily Low 22.7
Previous Weekly High 24.21
Previous Weekly Low 23.33
Previous Monthly High 26.09
Previous Monthly Low 23.57
Daily Fibonacci 38.2% 22.87
Daily Fibonacci 61.8% 22.98
Daily Pivot Point S1 22.58
Daily Pivot Point S2 22.42
Daily Pivot Point S3 22.13
Daily Pivot Point R1 23.03
Daily Pivot Point R2 23.32
Daily Pivot Point R3 23.48

 

 

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