- Silver trades in a tight range and consolidates its recent gains to a multi-week high.
- The overnight break through the 50/50% DMA confluence of the Fibonacci level favors the bulls.
- Any significant drop could now be seen as a buying opportunity and remain short-lived.
the silver it consolidates the strong gains of the previous day to hit a six-week high and remains confined to a range above $20.50 in the American session.
The overnight break through the $20.30-$20.35 confluence – comprising the 50-day SMA and 50% Fibonacci level of the $22.52-$18.15 decline – favors the bulls. Positive technical indicators on the daily chart lend credence to the constructive setup and support the prospects for a further near-term appreciation move.
Therefore, a further move towards the 61.8% Fibonacci level around the $20.85 area now looks like a distinct possibility. Follow-up buying beyond the $21.00 mark would be seen as a new trigger for the bulls and lift XAG/USD towards the $21.40-$21.50 intermediate resistance en route to the $22.00 round level.
The latter coincides with the 100-day SMA and should limit XAG/USD’s gains, at least for now. That said, a convincing break above should pave the way for an extension of the recent recovery move from a two-year low around the $18.15 region touched on July 14.
On the other hand, the resistance breakout point of the $20.35 confluence at $20.30 seems to protect the immediate downside ahead of the $20 level. It is closely followed by the $19.80-$19.75 region (Fibo. 38.2%), Friday’s low around the $19.55 area, and support at the 23.6% Fibonacci level, around the area. from $19.20.
Failure to defend the mentioned support levels would negate any short-term positive bias and return to favoring the bears. XAG/USD would then become vulnerable to weaken further below $19.00 towards the next relevant support near the $18.40 area on the way to the yearly low around the $18.15 region.
daily chart
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Technical levels
Source: Fx Street
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