XAG/USD seems poised to continue higher and aiming to reclaim $21.00
- Silver is oscillating in a narrow band, consolidating recent gains at multi-week highs.
- The overnight breakout of the 50 DMA/$50 Fibo. Confluence favors bullish traders.
- Any significant dips could now be viewed as a buying opportunity and be short-lived.
Silver consolidates yesterday’s strong gains to a six-week high and remains range-bound above the mid-$20.00s heading into the North American session.
The overnight breakout through the $20.30 to $20.35 confluence – comprised of the 50-day SMA and the 50% Fibonacci retracement level of the $22.52 to $18.15 crash – favors bullish ones dealer. Positive technical indicators on the daily chart lend credence to the constructive lineup and support the prospects for further short-term appreciation.
Hence a subsequent move higher towards the 61.8% Fibo. -Level around the $20.85 area now looks like a definite possibility. Some follow-up buying above $21.00 would be seen as a new trigger for bulls and lift the XAG/USD towards the $21.40-$21.50 intermediate resistance on the way to the round $22.00 level.
The latter coincides with the 100-day SMA and should keep further gains in XAG/USD in check, at least for now. However, a convincing break to the upside should pave the way for an extension of the recent recovery move from a two-year low around the $18.15 region set on July 14th.
On the upside, the $20.35-$20.30 confluence resistance breakpoint now appears to be protecting the immediate downside ahead of the $20.00 psychological level. Closely followed by the $19.80-$19.75 region (38.2% Fibo level), Friday’s swing low around the $19.55 area and the 23.6% Fibo. Support level around the $19.20 zone.
A failure to defend the above support levels would negate any short-term positive bias and shift the bias back in favor of bearish traders. XAG/USD would then become vulnerable for further weakness below $19.00 towards the next relevant support near the $18.40 area on the way to the YTD lows around the $18.15- Region.