Silver Price Analysis: XAG/USD rallies to one-week high, bulls await move beyond $22.00

Silver witnessed a dramatic intraday turnaround and rallied nearly 3% from a three-day low, around the $21.30-25 region touched earlier this Thursday. The strong momentum pushed the white metal to a one-week high during the early North American session, with bulls now awaiting sustained strength beyond the $22.00 round-figure mark.

From a technical perspective, the XAG/USD, so far, has struggled to find acceptance above the 50% Fibonacci retracement level of the $23.24-$20.46 downfall. Moreover, technical indicators on the daily chart - though have been recovering - are still holding deep in the bearish territory. This warrants caution before positioning for any further gains.

Hence, a subsequent move up is more likely to attract some selling near the 100-period SMA on the 4-hour chart, currently around the $22.10 region. This is closely followed by the 61.8% Fibo. level, around the $22.20 area, which if cleared will be seen as a fresh trigger for bulls and set the stage for an extension of the recent recovery from the YTD low.

On the flip side, any meaningful pullback now seems to find decent support near mid-$21.00s, or the 38.2% Fibo. level. Sustained breakthrough, leading to some follow-through weakness below the daily low, around the $21.30-$21.25 region, will shift the bias back in favour of bearish traders and prompt aggressive technical selling around the XAG/USD.

The downward trajectory would then drag spot prices to the 23.6% Fibo. level, around the $21.15 area, en-route the $21.00 mark. Bearish traders could eventually aim back to challenge the YTD low, around the $20.45 region touched last week.

Silver 4-hour chart

Key levels to watch