- Silver regains traction on Monday and reverses a major part of Friday’s fall to over a one-week low.
- Bulls still need to wait for a move beyond the $20.30-35 confluence before placing aggressive bets.
- A convincing break below the $19.20 support zone would negate any near-term positive outlook.
Silver attracts some dip-buying near the $19.80 region on Monday and recovers further from over a one-week low set in the previous session. The white metal builds on its steady intraday ascent through the early European session and climbs back above the $20.00 psychological mark in the last hour.
From a technical perspective, any subsequent move up is more likely to confront stiff resistance and remain capped near the $20.30-$20.35 confluence. The said barrier comprises the 50-day SMA and the 50% Fibonacci retracement level of the $22.52-$18.15 downfall, which should act as a pivotal point.
Oscillators on the daily chart, meanwhile, are holding in the bullish territory and have again started gaining positive traction on hourly charts. This, in turn, supports prospects for an eventual breakout through the aforementioned hurdle and a move towards the 61.8% Fibo. level, around the $20.85 area.
Some follow-through buying beyond the $21.00 mark would be seen as a fresh trigger for bulls and pave the way for a more toward the next relevant hurdle near the $21.40-$21.50 area. The XAG/USD could eventually aim to reclaim the $22.00 round figure, which coincides with the 100-day SMA resistance.
On the flip side, the 38.2% Fibo. level, around the $19.80-$19.75 region, now seems to protect the immediate downside. Any further decline is more likely to stall and find support near Friday's swing low, around the $19.55 area, which is followed by the 23.6% Fibo. level, around the $19.20 zone.
Failure to defend the aforementioned support levels would shift the bias back in favour of bearish traders and make the XAG/USD vulnerable to weaken below the $19.00 mark. The downfall could then drag spot prices to the $18.40 support en route to the YTD low, around the $18.15 region touched on July 14.
Silver daily chart
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Key levels to watch
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