XAG / USD appears ready to test the USD 25.55-60 area
- Silver made some dip buying on Monday and made up some of its intraday losses.
- The technical setup favors bullish traders and supports the prospect of additional profits.
Silver slid down on the first day of the week, despite the downward tick showing some resilience below the 50% Fibonacci level of the decline from $ 28.75 to $ 21.42. The white metal has now recovered much of its intraday losses and was last traded around the $ 25.20 region, just below its highest since August 5th, which was touched on Friday.
The emergence of some dip buying at lower levels is due to the ongoing breakout of the 100-day SMA / 38.2% Fibo last week. Confluence Barrier and the $ 24.50 Supply Zone. A subsequent move past the 50% fibo. The level around the key psychological level of USD 25.00 favors bullish traders and supports the prospect of further gains.
The positive outlook is reinforced by bullish oscillators on the daily chart, which are still far from being in the overbought territory. As such, some follow-up move towards the $ 25.55-60 region on the way to the $ 26.00 mark remains a distinct possibility. The latter is consistent with the 61.8% Fibo. Level and should be a strong barrier for the XAG / USD.
On the flip side, any significant corrective pullback could continue to attract some dip buying and be limited near the resistance point of $ 24.50. Failure to defend the mentioned support could result in technical selling and vulnerable XAG / USD to accelerate the corrective pullback towards the USD 24.00 round mark.