• Silver gained positive traction on Friday and reversed a part of the previous day’s slide to the YTD low.
  • Extremely oversold RSI (14) on the daily chart was seen as a key factor that prompted short-covering.
  • The double-bottom support breakpoint, near the $21.40 area, should now cap any meaningful upside.

Silver witnessed a short-covering bounce on the last day of the week and recovered a part of the overnight slump to its lowest level since July 2020. The recovery momentum extended through the early European session and pushed spot prices back closer to the $21.00 round-figure mark.

Given that RSI (14) on the daily chart is flashing extremely oversold conditions, traders opted to lighten their bearish bets around the XAG/USD amid modest US dollar pullback from a two-decade high. Ay meaningful upside, however, still seems elusive amid the risk-on impulse in the markets.

The overnight sustained below the double-bottom support near the $21.40 region was seen as a fresh trigger for bearish trades. This comes on the back of the recent breakdown through an ascending trend-line and suggests the attempted recovery runs the risk of fizzling out rather quickly.

Hence, any subsequent move up is more likely to confront stiff resistance and remain capped near the aforementioned support breakpoint, around the $21.40 area. That said, sustained strength beyond has the potential to lift the XAG/USD and allow bulls to reclaim the $22.00 round figure.

On the flip side, the YTD low, around the $20.65-$20.60 region, now seems to protect the immediate downside. Some follow-through selling would reaffirm the near-term negative bias and make the XAG/USD vulnerable to slide further towards challenging the $20.00 psychological mark.

Silver daily chart

fxsoriginal

Key levels to watch

XAG/USD

Overview
Today last price 20.94
Today Daily Change 0.25
Today Daily Change % 1.21
Today daily open 20.69
 
Trends
Daily SMA20 23.28
Daily SMA50 24.41
Daily SMA100 23.89
Daily SMA200 23.65
 
Levels
Previous Daily High 21.66
Previous Daily Low 20.62
Previous Weekly High 23.28
Previous Weekly Low 22.1
Previous Monthly High 26.22
Previous Monthly Low 22.68
Daily Fibonacci 38.2% 21.02
Daily Fibonacci 61.8% 21.26
Daily Pivot Point S1 20.32
Daily Pivot Point S2 19.94
Daily Pivot Point S3 19.27
Daily Pivot Point R1 21.36
Daily Pivot Point R2 22.04
Daily Pivot Point R3 22.41

 

 

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