- Silver now appears to have entered a bullish consolidation phase near a two-week high.
- The bulls could wait for a sustained move beyond the $23.45 zone before placing further bets.
- The weakness below $23.00 could attract some buying and remain capped.
XAG Silver was seen trading in a range around the $23.15-$23.30 region during the first half of the European session and consolidated its recent gains to a two-week high.
From a technical perspective, XAG/USD has, thus far, struggled to gain momentum beyond the 100-day SMA resistance. This is closely followed by the horizontal resistance at $23.40-$23.45, which should now act as a pivotal point for short-term traders.
The oscillators on the daily chart have just started moving towards the positive territory, although they lacked strong momentum. Therefore, it will be prudent to wait for sustained strength beyond the aforementioned barrier before positioning for further gains.
XAG/USD could then accelerate the positive move and aim to reclaim the $24.00 round figure mark. The momentum could extend further and allow the bulls to challenge the yearly high around the $24.70 zone touched on Jan 20.
On the other hand, the $23.00 level now seems to protect the immediate drop ahead of the overnight low around the $22.75 and $22.50 area. Some follow-on selling would negate the positive bias and make XAG/USD vulnerable.
The next relevant support is pinned near the $22.00 mark, which if broken decisively will shift the bias firmly in favor of bearish traders. This, in turn, should pave the way for a drop towards double bottom support around the $21.40 area.
XAG daily chart
Additional technical levels
Source: Fx Street
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