Silver Price Analysis: XAG/USD Jumps Back Above $20.00

• Silver regains traction on Monday and reverses a major part of Friday’s decline to a one-week low.
• The bulls still need to wait for a move beyond the confluence region at $20.30-35 before opening aggressive positions.
• A convincing break below the $19.20 support zone would nullify any short-term positive outlook.

Silver attracts some buying near the $19.80 area on Monday and extends the recovery from a one-week low set the day before. The white metal continues its intraday rise during the first hour of the European session and breaks back above the psychological level of $20.00 in the last hour.

From a technical point of view, any further move higher is more likely to face stiff resistance and be capped near the $20.30-$20.35 confluence ergion. Such a barrier comprises the 50-day SMA and the 50% Fibonacci retracement of the $22.52 drop to $18.15, which should act as a pivot point.

The oscillators on the daily chart, meanwhile, remain bullish and have once again gained positive traction on the hourly charts. This, in turn, supports the prospects for an eventual break through the mentioned hurdle and a move towards the Fibonacci 61.8% around the $20.85 zone.

Continuation buying above the $21.00 level would be seen as a new trigger for the bulls and pave the way for the next relevant hurdle near the $21.40-$21.50 area. XAG/USD could aim to reclaim the $22.00 round level, which coincides with the 100-day SMA resistance.

On the other hand, the 38.2% Fibonacci around the $19.80-$19.75 area now seems to protect the immediate downside. Any further decline is more likely to stall and find support near Friday’s low around the $19.55 area, which is followed by the Fibonacci 23.6% around the $19.20 area.

If the mentioned support levels are not defended, the bias would again favor the bears and make XAG/USD vulnerable to weakening below the $19.00 level. Further down, the drop could drag cash prices towards the $18.40 support on the way to the yearly low around the $18.15 area touched on July 14.

silver daily chart

silver key levels