Silver Price Analysis: XAG/USD struggles to find acceptance above $22.00, retreats from one-week top

Silver touches a one-week high on Monday, albeit struggles to capitalize on the momentum.
The technical setup favours bears and supports prospects for an extension of the recent fall.
A sustained strength beyond the $22.20-30 region is needed to negate the negative outlook.

Haresh Menghani FXStreet

Silver builds on Friday's breakout momentum through a multi-day-old trading range and gains strong follow-through traction for the second successive day. The white metal climbs to a one-week high on Monday, albeit struggles to capitalize on the move or find acceptance above the $22.00 mark, warranting some caution before placing fresh bullish bets.

The recent failure near a technically significant 200-day Simple Moving Average (SMA) and a subsequent breakdown through the $22.30-$22.20 horizontal support was seen as a fresh trigger for bearish traders. Moreover, oscillators on the daily chart – though have recovered from lower levels – are still holding in the negative territory. This, in turn, suggests that the path of least resistance for the XAG/USD remains to the downside and supports prospects for the emergence of fresh selling at higher levels.

Hence, any further move up is more likely to remain capped near the aforementioned support breakpoint, now turned resistance, around the $22.20-$22.30 region. The said area should act as a pivotal point for short-term traders, which if cleared decisively might negate the negative outlook and prompt an aggressive short-covering move. The XAG/USD might then aim to reclaim the $23.00 mark and extend the upward trajectory further towards challenging the 200-day SMA, currently around the $23.35 area.

On the flip side, weakness below the daily low, around the $21.60 area, will reaffirm the negative bias and drag the XAG/USD back towards a multi-day-old trading range resistance breakpoint, around the $21.3-$21.30 region. The next relevant support is pegged near the $21.00 mark, below which the downward trajectory could get extended towards a nearly seven-month low, around the $20.70-$20.65 zone touched last week, en route to the YTD trough – levels just below the $20.00 psychological mark.

Silver daily chart

Technical levels to watch

XAG/USD

Overview
Today last price	21.7
Today Daily Change	0.10
Today Daily Change %	0.46
Today daily open	21.6

Trends
Daily SMA20	22.52
Daily SMA50	23.11
Daily SMA100	23.38
Daily SMA200	23.39

Levels
Previous Daily High	21.62
Previous Daily Low	20.81
Previous Weekly High	22.2
Previous Weekly Low	20.68
Previous Monthly High	24.82
Previous Monthly Low	22.12
Daily Fibonacci 38.2%	21.31
Daily Fibonacci 61.8%	21.12
Daily Pivot Point S1	21.07
Daily Pivot Point S2	20.53
Daily Pivot Point S3	20.25
Daily Pivot Point R1	21.88
Daily Pivot Point R2	22.16
Daily Pivot Point R3	22.7

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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