- Silver has been aggressively bid on Thursday and has risen to a one-week high.
- Lack of follow through beyond the 50% Fibonacci level justifies bulls’ caution
- A break below $21 would set the stage for further short-term losses.
XAG silver experienced a dramatic intraday reversal and was up nearly 3% from a three-day low around the $21.30-$25 area it touched on Thursday. The strong momentum took the white metal to a one-week high during the early American session, with the bulls now expecting sustained strength beyond $22.00.
From a technical point of view, XAG/USD has so far struggled to find acceptance above the Fibonacci 50% level of the $23.24 drop to $20.46. Furthermore, the technical indicators on the daily chart -although they have recovered- continue to remain in bearish territory. This warrants caution before positioning for further gains.
Therefore, a further move to the upside is more likely to attract some selling near the 100-period SMA on the 4hrs chart, currently around the $22.10 region. This is followed by the near 61.8% Fibonacci level around the $22.20 area, which if breached will be seen as a new trigger for the bulls and will set the stage for an extension of the recent recovery from the yearly low.
On the other hand, any significant pullback seems to find good support near $21.50, or the 38.2% Fibonacci level. A sustained break, leading to some tracking weakness below the daily low around the $21.30-$21.25 region, will shift the bias in favor of bearish traders and trigger aggressive technical selling around XAG/ USD.
The downward trajectory would drag the price of the pair to the 23.6% Fibonacci level, around the $21.15 zone, on the way to $21.00. The bears could once again challenge the low of the year around the $20.45 zone touched last week.
4 hour chart
|Last Price Today||21.59|
|Today’s Daily Change||-0.04|
|Today’s Daily Change %||-0.18|
|Today’s Daily Opening||21.63|
|20 Daily SMA||22.66|
|50 Daily SMA||24.17|
|100 Daily SMA||23.84|
|200 Daily SMA||23.61|
|Previous Daily High||21.92|
|Previous Daily Minimum||21.51|
|Previous Maximum Weekly||22.37|
|Previous Weekly Minimum||20.46|
|Monthly Prior Maximum||26.22|
|Previous Monthly Minimum||22.68|
|Daily Fibonacci 38.2%||21.76|
|Daily Fibonacci 61.8%||21.67|
|Daily Pivot Point S1||21.46|
|Daily Pivot Point S2||21.28|
|Daily Pivot Point S3||21.05|
|Daily Pivot Point R1||21.86|
|Daily Pivot Point R2||22.09|
|Daily Pivot Point R3||22.27|
Source: Fx Street