- Silver has captured some lower level buying on the first day of a new trading week.
- Acceptance above the neckline of the reverse shoulder-head-shoulder pattern favors the bulls.
- A sustained move above the 61.8% Fibonacci will reaffirm the positive bias.
Silver managed to find some support near the $ 23.00 level on Friday and has attracted some buying at lower levels on the first day of a new trading week. The white metal has moved higher early in the European session, although it has retreated slightly afterwards.
Looking at the technical chart, last week’s sustained move past the $ 23.15-20 barrier marked a bullish break above the neckline of the reverse shoulder-head-shoulder pattern. The emergence of new purchases near the mentioned resistance breakout point, now converted to support, adds credibility to the positive bias.
The constructive setup is bolstered by the fact that the technical indicators on the daily chart have been gaining positive traction and are still far from being in overbought territory. A sustained move past the 61.8% Fibonacci drop of 24.87-21.42 will reaffirm the optimistic outlook.
XAG / USD could then try to regain the $ 24.00 level en route to the next relevant hurdle near the 24.25-3 region. Momentum could extend further towards the September monthly highs, near the $ 24.75-80 zone, before the bulls finally aim to regain the key psychological level of $ 25.00.
On the other hand, the breakout point of the pattern at $ 23.20-23.00 should defend the immediate fall. The mentioned region coincides with the 200 SMA on the 4-hour 50% Fibonacci chart, which in turn should act as a strong short-term base for the XAG / USD.
A convincing breakout below will negate the bullish outlook and trigger an aggressive technical sell. The XAG / USD could accelerate the decline towards the 38.2% Fibonacci around the $ 22.75-70 region before dropping further towards $ 22.50 and the $ 22.25 region (23.6% Fibonacci).
Silver 4 hour chart
Silver technical levels