- Silver rises for the second day in a row.
- The technical setup favors the bulls and supports the prospects for a further appreciation move.
- A convincing break below the $19.20 area would turn the bias in favor of the bears.
Silver gained momentum and rose for the second day in a row on Thursday, moving further away from the multi-day low around the $19.75 region on Wednesday. The intraday rally accelerated in the European session and took the white metal to a new daily high, around the $20.25 area.
From a technical point of view, any further move to the upside is likely to face stiff resistance near the $20.30-20.40 confluence. That barrier comprises the 50% Fibonacci retracement level of the $22.52 drop to $18.15 and the 50-day simple moving average. This should now act as a key pivot point and help determine the short-term path for XAG/USD.
The oscillators on the daily chart, meanwhile, remain comfortably in the positive territory and have been gaining traction on the hourly charts. The technical setup supports the prospects for an eventual breakout through the aforementioned confluence resistance. XAG/USD could then rally to the 61.8% retracement level around the $20.85 area, on the way to the $21.00 area.
The momentum could spread further and drive prices higher. next relevant hurdle, near $21.40-$21.50 zone en route to $22.00. The latter coincides with the 100-day simple moving average, which if broken decisively would be seen as a new trigger for bullish traders and pave the way for a further short-term appreciation move.
Secondly, $19.80 to $19.75 zone, or the 38.2% Fibonacci level, now appears to act as immediate support. Any further decline is more likely to stop near the 23.6% retracement around the $19.20 region. Some follow-up selling would suggest that the recovery from last year’s low has run out and would change the bias in favor of the bears.
XAG/USD would then become vulnerable to weaken further below $19.00 and could test the intermediate support at $18.50. Prices could challenge the low of recent years, around the $18.15 zone, reached on July 14.
silver day chart
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Source: Fx Street
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