Silver Price Analysis: XAG/USD clings to gains near mid-$22.00s, not out of the woods yet

Silver attracts some buying on Tuesday and holds above the 38.2% Fibo. level support.
The setup favours bearish traders and supports prospects for an eventual breakdown.
A sustained strength beyond the 50-day SMA is needed to negate the bearish outlook.

Haresh Menghani FXStreet

Silver regains some positive traction on Tuesday and sticks to its modest intraday gains, just below mid-$22.00s through the early European session. The white metal, however, lacks bullish conviction and remains well within the striking distance of a nearly two-month low touched on Monday.

Looking at the broader picture, the XAG/USD last week confirmed a bearish breakdown through the lower end of a multi-week-old trading range support near the $23.00-$22.90 area. Moreover, bearish technical indicators on the daily chart support prospects for an extension of the recent sharp pullback from the highest level since April 2022 touched last Thursday.

The XAG/USD, however, manages to hold above the $22.15 support zone, or the 23.6% Fibonacci retracement level of the recent rally from October 2022, which should act as a pivotal point. Some follow-through selling below the $22.00 mark will reaffirm the negative bias and drag the white metal to the next relevant support near the 100-day SMA, around the $21.60-$21.55 zone.

On the flip side, any meaningful recovery is likely to confront a hurdle near the aforementioned support breakpoint, around the $23.00-$22.90 region. This is closely followed by the 50-day SMA, currently around the $23.30-$23.35 region. A sustained strength beyond will negate the near-term bearish outlook for the XAG/USD and prompt some short-covering rally.

The momentum might then allow bulls to reclaim the $24.00 round figure. The XAG/USD could eventually climb back to the $24.55-$24.60 heavy supply zone en route to the $25.00 psychological mark for the first time since April 2022 and the next relevant hurdle near the $25.35 region.

Silver daily chart

Key levels to watch

XAG/USD

Overview
Today last price	22.43
Today Daily Change	0.17
Today Daily Change %	0.76
Today daily open	22.26

Trends
Daily SMA20	23.62
Daily SMA50	23.45
Daily SMA100	21.72
Daily SMA200	21.01

Levels
Previous Daily High	22.62
Previous Daily Low	22.15
Previous Weekly High	24.64
Previous Weekly Low	22.29
Previous Monthly High	24.55
Previous Monthly Low	22.76
Daily Fibonacci 38.2%	22.33
Daily Fibonacci 61.8%	22.44
Daily Pivot Point S1	22.06
Daily Pivot Point S2	21.87
Daily Pivot Point S3	21.59
Daily Pivot Point R1	22.53
Daily Pivot Point R2	22.81
Daily Pivot Point R3	23

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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