Silver Price Analysis: XAG/USD trades with modest losses, bullish potential intact


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  • Silver remains on the defensive for the second straight day, albeit lacks follow-through.
  • The technical setup supports prospects for the emergence of dip-buying at lower levels.
  • Bulls need to wait for a move beyond the 61.8% Fibo. level before placing fresh bets.

Silver extends its consolidative price move for the second straight day on Tuesday and remains well within the striking distance of its highest level since February 3 touched the previous day. The white metal trades just below the mid-$22.00s during the early European session and still seems poised to prolong its recent appreciating move witnessed over the past two weeks or so.

The recent breakout through the $21.65-$21.70 confluence resistance was seen as a fresh trigger for bullish traders. Furthermore, a subsequent move and acceptance above the 50% Fibonacci retracement level of the recent sharp pullback from a multi-month peak further add credence to the constructive outlook. This, along with bullish oscillators on 4-hour and daily charts, suggests that the path of least resistance for the XAG/USD is to the upside.

Hence, any subsequent dip towards the overnight swing low, around the $22.20 area, which coincides with the 50$ Fibo. level, could be seen as a buying opportunity. That said, some follow-through selling below the $22.00 mark could drag the XAG/USD to the $21.65-$21.70 confluence resistance break point. This comprises the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibo. level, which should act as a pivotal point.

A convincing break below the latter could expose the $21.00 mark, representing the 23.6% Fibo. level. The XAG/USD might then turn vulnerable to accelerate the fall towards testing the $20.55-$20.50 intermediate support en route to the $20.00 psychological mark. The downward trajectory could get extended further towards the next relevant support near the $19.60 region.

On the flip side, the $22.70 area, or a multi-week top touched on Monday, could act as an immediate hurdle ahead of the 61.8% Fibo. level, around the $22.85 region and the $23.00 mark. Some follow-through buying will pave the way for a move towards testing the next relevant hurdle near the $23.25-$23.35 zone en route to the $24.00 round-figure mark. Bulls might then aim to challenge the multi-month top, around the $24.65 zone touched in February.

Silver 4-hour chart

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Key levels to watch

XAG/USD

Overview
Today last price 22.44
Today Daily Change -0.11
Today Daily Change % -0.49
Today daily open 22.55
 
Trends
Daily SMA20 21.2
Daily SMA50 22.31
Daily SMA100 22.36
Daily SMA200 20.95
 
Levels
Previous Daily High 22.72
Previous Daily Low 22.22
Previous Weekly High 22.61
Previous Weekly Low 20.54
Previous Monthly High 24.64
Previous Monthly Low 20.42
Daily Fibonacci 38.2% 22.41
Daily Fibonacci 61.8% 22.53
Daily Pivot Point S1 22.28
Daily Pivot Point S2 22
Daily Pivot Point S3 21.78
Daily Pivot Point R1 22.77
Daily Pivot Point R2 22.99
Daily Pivot Point R3 23.27

 

 

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