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

Silver attracts some intraday selling on the first day of a new week and moves away from over a three-week high, around the $24.35-$24.40 region touched on Friday. The white metal sticks to a mildly negative tone through the early part of the European session, albeit manages to hold its neck above the $24.00 round-figure mark.

Any subsequent slide below the aforementioned handle is more likely to find some support near the $23.85-$23.80 area, or the 200-period Simple Moving Average (SMA) on the 4-hour chart. Against the backdrop of positive technical indicators on 4-hour/daily charts, the said area could act as a pivotal point for intraday traders and help limit any further decline.

Silver 4-hour chart

A sustained break below, however, might prompt some technical selling and drag the XAG/USD towards the $23.55 region. This is closely followed by support near the $23.40 area, representing the 200-day SMA, which if broken decisively might shift the near-term bias in favour of bearish traders and pave the way for some meaningful downside.

On the flip side, the $24.35-$24.40 area might continue to act as an immediate strong resistance, which if cleared should allow the XAG/USD to surpass the $24.55-$24.60 intermediate hurdle and aim to reclaim the $25.00 psychological mark. The positive move could get extended further towards the $25.25 zone, or the July monthly swing high, en route to the $26.00 mark.

Zooming out to the daily chart, the recent price action witnessed since early June seems to constitute the formation of a bearish head and shoulders pattern on the daily chart. The pattern, however, will be confirmed on a sustained break below the neckline support, around the $22.20-$22.10 region.

XAG/USD daily chart

Key levels to watch