Silver Price Analysis: XAG/USD drives above $23, returns above 50% Fibo retracement

Silver price (XAG/USD) has shifted comfortably above the critical resistance of $23.00 in the early European session. The white metal is extending its upside as the US Dollar Index (DXY) is looking vulnerable above 104.00.

The USD Index has sensed selling pressure as investors are expecting that the White House and Republican leaders will reach a bipartisan, which would support the United States Treasury in avoiding a default. White House officials and House of Representatives Kevin McCarthy-led team are vigorously involved in negotiations. The deviation in proposed budget spending by the White House to Republican leaders has narrowed to $70 billion from the original proposal of $1 trillion.

Meanwhile, signs of a pause in the policy-tightening spell by the Federal Reserve (Fed) are also fueling strength into the Silver price.

Silver price has shown a decent recovery and has climbed back above the 50% Fibonacci retracement (plotted March 08 low at $19.92 to April 14 high at $26.08) at $23.00 on a four-hour scale. The white metal has to pass through plenty of filters for a bullish reversal. The asset is still auctioning in a Falling Channel chart pattern.

The declining 20-period Exponential Moving Average (EMA) at $23.15 is acting as a barricade for the Silver price bulls.

The Relative Strength Index (RSI) (14) is making efforts for shifting into the 40.00-60.00 range.

A confident break above May 25 high at $23.14 will send the major toward May 18 low at $23.48 followed by May 19 high at 24.00.

On the flip side, a downside move below May 26 low at $22.68 will strengthen the US Dollar bulls and will drag the asset toward 61.8% Fibo retracement at $22.28 and the major support at $22.00.

Silver four-hour chart