Silver Price Analysis: XAG/USD flirts with confluence zone around $20.40

  • Silver is finding some selling for the second day in a row and is pulling away from a multi-week high.
  • The technical set-up seems to remain tilted in favor of the bulls and supports the prospects for further gains.
  • A sustained break below the $19.20 area is needed to negate the short-term bullish outlook.

Silver is down for the second day in a row and continues to pull back from a six-week high reached on Monday. The white metal remains under pressure during the European session on Wednesday and is currently hovering near a two-day low around the $20.40-$20.35 region.

This zone signals confluence support, comprising the 50-day SMA and the 50% Fibonacci retracement of the $22.52 drop to $18.15. A convincing break below this region could spark some technical selling and drag XAG/USD back towards the psychological $20.00 level.

This last level should act as a key point, which if broken decisively would make XAG/USD vulnerable. A follow up sell below the $19.80-$19.75 zone ($38.2% Fibonacci) would reaffirm the negative bias and expose the 23.6% Fibonacci around the $19.20 zone.

This is followed by the $19.00 level, below which XAG/USD could accelerate to the next relevant support near the $18.40 area. Further below, prices could fall to challenge the yearly low, around the $18.15 zone touched on July 14.

On the other hand, the $20.65-$20.70 zone seems to act as an immediate resistance ahead of the Fibonacci 61.8% around the $20.85 region and the $21.00 round level. Sustained strength above this region would be seen as a new trigger for the bulls and pave the way for further gains.

The post-up move has the potential to lift XAG/USD towards intermediate resistance near the $21.40-$21.50 zone on the way to the 100-day SMA, currently around the $21.85 region, and the of $22.00.

silver daily chart

fxsoriginal

silver key levels

XAG/USD

Overview
last price today 20.4
daily change today -0.13
Today’s daily change % -0.63
Daily opening today 20.53
Trends
daily SMA20 19.4
daily SMA50 20.32
daily SMA100 21.89
daily SMA200 22.76
levels
Previous daily high 20.74
Previous Daily Low 20.42
Previous Weekly High 20.51
Previous Weekly Low 19.55
Previous Monthly High 20.37
Previous Monthly Low 18.15
Daily Fibonacci of 38.2%. 20.54
Daily Fibonacci of 61.8% 20.62
Daily Pivot Point S1 20.38
Daily Pivot Point S2 20.23
Daily Pivot Point S3 20.05
Daily Pivot Point R1 20.71
Daily Pivot Point R2 20.89
Daily Pivot Point R3 21.04

Source: Fx Street

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