- Silver reverses an intraday drop to levels below $21.00, though no follow up.
- Repeated failures to find acceptance above the 200 DMA warrants some caution for bulls.
- A convincing break below the weekly low is needed to nullify any short-term positive bias.
the silver attracts some buying on the dips on Thursday and caps the previous day’s pullback from the $21.60 area or the lowest level since June 22nd. However, the intraday bounce off the sub-$21.00 levels lacks continuity as traders eagerly await the release of crucial US consumer inflation figures.
From a technical point of view, XAGUSD has, so far, struggled to break above the important resistance at the 200-day SMA. Meanwhile, oscillators on the daily chart remain comfortably in bullish territory and support the prospects for further gains. That said, it will still be prudent to wait for a sustained move beyond the $21.60 area before confirming a further breakout to the upside.
XAGUSD could then pick up momentum and try to recapture the $22.00 signal. The next major hurdle is near the $22.30 to $22.35 area, closely followed by the June high around $22.00. The latter should act as a key point, which if taken decisively will set the stage for an extension of the recent rally from around $18.00.
On the other hand, any significant pullback below the $21.00 signal could be seen as a buying opportunity and capped near the weekly low around the $20.40 area. Failure to defend such support could negate any short-term positive bias and drag XAGUSD to the key psychological level of $20.00. The bearish trajectory could extend towards the breakout point of the horizontal resistance at $19.65.
Silver daily chart
Key levels to watch
Source: Fx Street
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