Silver Price Analysis: XAG/USD looks poised to continue appreciating and could test the 200-day SMA

• Silver continues the breakout momentum of the previous day and rises to the $21.00 area.
• The setup favors the bulls and supports the prospects for an extension of the appreciation move.
• Any significant corrective decline would be seen as a buying opportunity and remains limited.

Silver extends the previous day’s strong move higher and gains traction for the third day in a row on Tuesday. This also marks the fifth day of positive movement in the previous six and lifts the white metal to the $21.00 region, or its highest level since late June at the start of the European session.

The previous day’s sustained break above the resistance of a nearly four-month downtrend line and the psychological $20.00 level, or the 100-day SMA, was seen as a new trigger for the bulls. Given that the technical indicators on the daily chart are still far from being in the overbought zone, the setup supports the prospects for an extension of the appreciation move for XAG/USD.

Continuation buying above the $21.00 round level will reaffirm the positive outlook and allow the bulls to challenge the all-important 200-day SMA. The latter is currently pegged just ahead of the $22.00 level, above which XAG/USD could rally towards the next relevant resistance near the $22.40 region. The momentum could extend further towards the $23.00 level.

On the other hand, the area of ​​$20.80 to $20.75 seems to protect the immediate fall. Any subsequent pullback is more likely to attract further buying and remains capped near the $20.00 level, or the 100-day SMA. This is followed by the downtrend line resistance breakout around the $19.55 region, which should now act as a strong base for XAG/USD.

silver daily chart

silver key levels