• Silver attracts fresh buying near the 50 DMA and reverses a major part of the overnight losses.
  • The technical set-up remains tilted in favour of bulls and supports prospects for further gains.
  • A sustained break below the $20.00 mark is needed to negate the near-term positive outlook.

Silver shows some resilience below the 50% Fibonacci retracement level of the $22.52-$18.15 downfall and catches fresh bids near the $20.25 area, or the 50-day SMA support on Friday. The white metal jumps to a fresh daily high, around mid-$20.00s during the early North American session, reversing a major part of the previous day's decline.

The emergence of fresh buying near a technically significant moving average suggests this week's pullback from the 61.8% Fibo. level has run its course and favours bullish traders. The constructive outlook is reinforced by bullish technical indicators on the daily chart, which are still far from being in the overbought territory.

Hence, a subsequent strength towards retesting the weekly high, around the $20.85 region, now looks likely a distinct possibility. Some follow-through buying, leading to a move beyond the $21.00 round-figure mark, would be seen as a fresh trigger for bullish traders and pave the way for a further near-term appreciating move for the XAG/USD.

Spot prices could then accelerate the momentum towards the $21.40-$21.50 intermediate resistance, above which the XAG/USD could challenge the 100-day SMA, currently around the $21.85 region. This is closely followed by the $22.00 mark and should act as a strong hurdle.

On the flip side, the $20.35-$20.25 confluence comprises the 50% Fibo. level and the 50 DMA, which, in turn, should continue to protect the immediate downside. The next relevant support is pegged near the $20.00 psychological mark. The latter should now act as a key pivotal point, which if broken decisively would shift the bias in favour of bearish traders.

Silver daily chart

fxsoriginal

Key levels to watch

XAG/USD

Overview
Today last price 20.49
Today Daily Change 0.17
Today Daily Change % 0.84
Today daily open 20.32
 
Trends
Daily SMA20 19.57
Daily SMA50 20.26
Daily SMA100 21.8
Daily SMA200 22.73
 
Levels
Previous Daily High 20.64
Previous Daily Low 20.25
Previous Weekly High 20.51
Previous Weekly Low 19.55
Previous Monthly High 20.37
Previous Monthly Low 18.15
Daily Fibonacci 38.2% 20.4
Daily Fibonacci 61.8% 20.49
Daily Pivot Point S1 20.16
Daily Pivot Point S2 20.01
Daily Pivot Point S3 19.78
Daily Pivot Point R1 20.55
Daily Pivot Point R2 20.79
Daily Pivot Point R3 20.94

 

 

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