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

silver key levels