- Silver is seen digesting its recent strong move towards a one-month high, set earlier this Monday.
- The oscillators on the daily chart favor the bulls and support the prospects for further gains.
- In the 4 hours chart, the RSI is slightly overbought, which justifies a consolidation before the next rise.
the silver struggles to ride last week’s strong bullish move and swings between tepid gains and small losses on the first day of a new week. The white metal continues the consolidating sideways price move during the early American session and remains confined to a range below $20.50, or the one-month high set earlier this Monday.
From a technical point of view, the XAG/USD, so far, has struggled to find acceptance above the 50% Fibonacci retracement level of the $22.52 drop to $18.15. Furthermore, the strong positive momentum stalls near the 50-day SMA. The latter should now act as a key point and help traders determine the next leg of a directional move.
The oscillators on the daily chart, meanwhile, have just started to gain positive traction and support the prospects for a further short-term appreciation move. However, the RSI (14) on the daily chart is already showing overbought conditions. This makes it prudent to wait for a short-term consolidation before the next XAG/USD rally.
Spot prices could then aim to break above the 61.8% Fibonacci level, around the $20.85 area, and reclaim the round $21.00 level. The momentum could extend further and lift XAG/USD towards the next relevant hurdle near the $21.40-$21.50 zone on the way to the $22.00 level and the 100-day SMA, currently around the $22.15 zone. .
On the other hand, any significant decline seems to find good support near the key psychological level of $20.00. Below is the 38.2% Fibonacci level, around the $19.80 area. A convincing break below the latter would suggest that the recovery from last year’s low has run out and shift the bias in favor of bearish traders.
Silver Daily Chart
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Technical levels
Source: Fx Street
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