• Silver gains traction for the second straight day and climbs to over a five-month peak.
  • The technical set-up favours bullish traders and supports prospects for further gains.
  • A convincing break below the $21.00 mark is needed to negate the positive outlook.

Silver builds on the previous day's breakout momentum through the very important 200-day SMA and scales higher for the second successive day on Friday. The white metal jumps to over a five-month high during the early European session, though struggles to find acceptance above the $22.00 round-figure mark. The XAGUSD, however, sticks to its intraday gains and is currently placed near the $21.85-$21.90 region, still up nearly 0.90% for the day.

The overnight rally from sub-$21.00 levels and a subsequent strength beyond a technically significant moving average supports prospects for a further near-term appreciating move. That said, RSI (14) on the daily chart is on the verge of breaking into overbought territory and warrants caution for aggressive bullish traders. This makes it prudent to wait for some near-term consolidation or a modest pullback before positioning for additional gains.

Nevertheless, the XAGUSD seems poised to climb beyond the $22.00 mark and could aim to test the next relevant hurdle near the $22.45-$22.50 region. The mentioned area marks a heavy supply zone and could act as a tough nut to crack for bulls. Some follow-through buying, however, will mark a fresh breakout and pave the way for a move towards reclaiming the $23.00 round figure. The momentum could eventually lift spot prices to May swing high, around the $23.25-$23.30 area.

On the flip side, the daily low, around the $21.45 region, which coincides with the 200 DMA breakout point should protect the immediate downside. Any further pullback could be seen as a buying opportunity and remain limited near the $21.00 mark. A convincing break below might trigger some technical selling and drag the XAGUSD to the $20.40 support zone. Failure to defend the aforementioned support levels could shift the near-term bias in favour of bearish traders.

Silver daily chart

fxsoriginal

Key levels to watch

XAG/USD

Overview
Today last price 21.9
Today Daily Change 0.22
Today Daily Change % 1.01
Today daily open 21.68
 
Trends
Daily SMA20 19.62
Daily SMA50 19.41
Daily SMA100 19.46
Daily SMA200 21.48
 
Levels
Previous Daily High 21.83
Previous Daily Low 20.96
Previous Weekly High 20.91
Previous Weekly Low 18.84
Previous Monthly High 21.24
Previous Monthly Low 18.09
Daily Fibonacci 38.2% 21.5
Daily Fibonacci 61.8% 21.29
Daily Pivot Point S1 21.15
Daily Pivot Point S2 20.62
Daily Pivot Point S3 20.28
Daily Pivot Point R1 22.02
Daily Pivot Point R2 22.36
Daily Pivot Point R3 22.9

 

 

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