XAG/USD bulls are taking a breather near the 50-day SMA hurdle near the mid-$20.00 area
- Silver appears to be digesting its recent strong rally to a one-month high set earlier this Monday.
- Oscillators on the daily chart favor bullish traders and support prospects for additional gains.
- A slightly overbought RSI on the 4-hour chart warrants a consolidation ahead of the next upward move.
Silver is struggling to capitalize on last week’s strong bullish move, oscillating between tepid gains and marginal losses on the first day of a new week, still in a range below the mid-$20.00 or 1-month high set earlier this year reached on Monday.
From a technical perspective, XAG/USD has struggled to find acceptance above the 50% Fibonacci retracement level of the $22.52 to $18.15 slide. Furthermore, the strong positive momentum is flat near the 50-day SMA. The latter should now act as an important pivot, helping traders determine the next leg of a directional move.
Meanwhile, the daily chart’s oscillators have just started to gain positive traction, supporting the prospects for further near-term appreciation. However, the daily chart’s RSI (14) is already indicating overbought conditions. Therefore, it is advisable to wait before the next XAG/USD rise.
Spot prices could then aim to outperform the 61.8% Fibo. level, around the $20.85 region, and reclaim the round number of $21.00. Momentum could extend further and XAG/USD could move towards the next relevant barrier nearby on the way to $22.00 and the 100-day SMA, currently around the $22.15 zone of the $21.40-$21.50 range.
On the downside, any significant slide in prices now seems to find decent support near the psychological $20.00 level. This is followed by the 38.2% Fibo. Levels around the $19.80 region. A convincing break below the latter would indicate that the recovery from the YTD low has lost momentum and shift the bias in favor of bearish traders.