Silver Price Analysis: XAG/USD corrects from three-week top, holds above $24.00 mark

Silver meets with some supply and erodes a part of the overnight gains to a three-week peak.
Extremely overbought RSI on hourly charts prompts traders to lighten some of their bullish bets.
Any subsequent slide might still be seen as a buying opportunity and is likely to remain limited.

Haresh Menghani FXStreet

Silver comes under some selling pressure on Thursday and for now, seems to have snapped a five-day winning streak to a three-week high, around the $24.35 region touched the previous day. The white metal extends intraday descent through the early European session and drops to a fresh daily low, around the $24.15 region in the last hour.

From a technical perspective, the extremely overbought Relative Strength Index (RSI) on hourly charts turns out to be a key factor that prompts some long-unwinding around the XAG/USD. That said, oscillators on the daily chart have just started gaining positive traction. Furthermore, the overnight breakout through the $23.75 confluence, comprising the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 50% Fibonacci retracement level of the July-August downfall, favours bulls.

Hence, any subsequent slide below the $24.00 round-figure mark is more likely to attract fresh buyers near the aforementioned confluence breakpoint, now turned support. This should help limit the downside for the XAG/USD near the $23.40 region. This is closely followed by support near the $23.25 area, which if broken could drag the white metal back towards the $23.00 mark. A convincing break below the latter will negate the positive outlook and shift the near-term bias in favour of bearish traders.

On the flip side, bulls might now wait for some follow-through buying beyond the overnight swing high, around the $24.35 area, before placing fresh bets. The XAG/USD might then aim to surpass the $24.55-$24.60 intermediate hurdle and climb further to the $25.00 psychological mark en route to the July monthly swing high, around the $25.25 zone. Some follow-through buying will mark a fresh breakout and pave the way for a further near-term appreciating move toward the $26.00 round figure.

Silver 4-hour chart

Technical levels to watch

XAG/USD

Overview
Today last price	24.15
Today Daily Change	-0.17
Today Daily Change %	-0.70
Today daily open	24.32

Trends
Daily SMA20	23.32
Daily SMA50	23.52
Daily SMA100	23.99
Daily SMA200	23.32

Levels
Previous Daily High	24.36
Previous Daily Low	23.41
Previous Weekly High	23.01
Previous Weekly Low	22.23
Previous Monthly High	25.27
Previous Monthly Low	22.52
Daily Fibonacci 38.2%	24
Daily Fibonacci 61.8%	23.77
Daily Pivot Point S1	23.7
Daily Pivot Point S2	23.08
Daily Pivot Point S3	22.75
Daily Pivot Point R1	24.65
Daily Pivot Point R2	24.98
Daily Pivot Point R3	25.6

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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