Silver Price Analysis: XAG/USD sticks to gains near $23.00 mark, lacks bullish conviction

Silver gains some positive traction, albeit struggles to capitalize on the move beyond $23.00.
The mixed technical setup warrants caution for bulls and before positioning for further gains.
A sustained break below the $22.50-45 area will be seen as a fresh trigger for bearish traders.

Haresh Menghani FXStreet

Silver (XAG/USD) builds on the previous day's goodish rebound from the vicinity of mid-$22.00s, or a multi-day low and gains some follow-through traction on Thursday. The white metal maintains its bid tone through the early part of the European session and currently trades around the $23.00 round-figure mark, up over 0.20% for the day.

The post-FOMC US Dollar (USD) selling bias remains unabated, which, in turn, is seen as a key factor driving flows towards the USD-denominated commodities, including the XAG/USD. This, along with positive technical indicators on the daily chart, supports prospects for a further appreciating move. That said, the recent repeated failures near the $23.60-$23.70 supply zone, which constitute the formation of a bearish multiple tops pattern, warrants caution for bullish traders.

In the meantime, any subsequent move up is more likely to confront stiff resistance near the very important 200-day Simple Moving Average (SMA), currently pegged around the $23.30 region. Bulls, meanwhile, need to wait for a convincing breakout through the $23.60-$23.70 barrier, before placing fresh bets. The XAG/USD might then aim to surpass the $24.00 mark and test the $24.20 hurdle before making a fresh attempt towards conquering the $25.00 psychological mark.

On the flip side, the $22.50-$22.45 region now seems to have emerged as an immediate strong support. Some follow-through selling, however, will be seen as a fresh trigger for bearish traders and drag the XAG/USD to the $22.00 mark. The downward trajectory could get extended further towards the $21.70 horizontal support en route to the $21.35-$21.30 region and the $21.00 mark. Silver could eventually drop to the $20.70-$20.65 area, or a seven-month low touched in October.

Silver daily chart

Technical levels to watch

XAG/USD

Overview
Today last price	23
Today Daily Change	0.06
Today Daily Change %	0.26
Today daily open	22.94

Trends
Daily SMA20	22.57
Daily SMA50	22.93
Daily SMA100	23.22
Daily SMA200	23.29

Levels
Previous Daily High	23.01
Previous Daily Low	22.54
Previous Weekly High	23.36
Previous Weekly Low	22.44
Previous Monthly High	23.7
Previous Monthly Low	20.68
Daily Fibonacci 38.2%	22.83
Daily Fibonacci 61.8%	22.72
Daily Pivot Point S1	22.65
Daily Pivot Point S2	22.36
Daily Pivot Point S3	22.18
Daily Pivot Point R1	23.12
Daily Pivot Point R2	23.3
Daily Pivot Point R3	23.59

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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