- The price of silver rises above month-long highs during the European session on Tuesday.
- Momentum appears strong enough to push XAG / USD above the $ 24.00 level.
Silver caught aggressive pips on Tuesday and reached month-long highs around the $ 23.70 region during the European session on Tuesday.
From a technical perspective, the XAG / USD showed some resilience below the 200 SMA on the 4-hour chart and managed to defend the $ 23.00 level for the second day in a row on Monday. The subsequent positive move validated the recent bullish breakout of the neckline of a reverse shoulder-head-shoulder pattern. This, in turn, supports the prospects for a further short-term bullish move.
Silver 4 hour chart
The constructive setup is bolstered by the fact that the technical indicators on the daily chart have just started to move into bullish territory and are still far from being in the overbought zone. The bulls may now be looking to take advantage of momentum above the resistance of a bearish trend line, which extends from the monthly highs in July around the $ 26.75-80 region.
Silver daily chart
However, the XAG / USD looks set to extend its recent recovery move from the yearly lows and its target of recovering the $ 24.00 level. This is followed by resistance near the $ 24.15-20 region, above which momentum could extend further towards the next relevant hurdle around the $ 24.75-80 region. The white metal could eventually rise to the key psychological level of $ 25.00.
On the other hand, the $ 23.50 region now appears to defend the immediate drop. Any subsequent pullback could still be seen as a buying opportunity near the $ 23.00 level, which should act as a strong short-term base for the XAG / USD and a key turning point for investors. A convincing breakout from this region could spark some technical selling and accelerate the corrective slide towards the $ 22.75-70 region.
Silver technical levels
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