- Silver gains positive traction for the second straight day, though the setup warrants caution for bulls.
- Any subsequent move up is likely to confront stiff barrier and remain capped near the 200-day SMA.
- A break below a multi-month ascending trend-line support will be seen as a fresh trigger for bears.
Silver attracts fresh buyers near the $23.00 mark on the first day of a new week and sticks to its modest intraday gains through the early part of the European session. The white metal currently trades around the $23.15 area, up 0.45% for the day, though remains below Friday's swing high.
Looking at the broader picture, the XAG/USD last week staged a solid recovery from the $22.30 support area – representing an ascending trend line extending from the June monthly low. The subsequent strength favours bullish traders, though technical indicators on the daily chart are yet to confirm a positive outlook and warrant some caution before positioning for additional gains.
Hence, any further move up is more likely to confront stiff resistance and remain capped near a technically significant 200-day Simple Moving Average (SMA), currently pegged around the $23.45 region. The said area should act as a pivotal point, above which the XAG/USD is more likely to surpass the 100-day SMA barrier near the $23.80 region and aim to reclaim the $24.00 mark.
The next relevant hurdle is pegged near the $24.30-$24.35 region, which if cleared decisively should lift the XAG/USD further towards the $25.00 psychological mark. The latter coincides with the August monthly swing high and some follow-through buying, leading to subsequent gains beyond the July peak, around the $25.25 region, will shift the near-term bias in favour of bullish traders.
On the flip side, the $22.80 area now seems to protect the immediate downside ahead of the $23.30 region, or a nearly one-month low touched last Thursday. A convincing break below will confirm a fresh breakdown and make the XAG/USD vulnerable to accelerate the fall towards the next relevant support near the $21.25 zone before eventually dropping to the $21.00 round-figure mark.
Silver daily chart
Technical levels to watch
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