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

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