- Silver saw some selling on Tuesday and gave back a portion of the previous day’s strong gains.
- A convincing break below the $22.40 support zone would pave the way for further losses.
- The bulls could wait for sustained strength above $23.00 before opening new positions.
Silver is having a hard time finding acceptance above the $23.00 level and capitalizing on the previous day’s gains to a fresh one-week high, witnessing some selling on Tuesday. The intraday decline extended into the early European session and dragged the white metal to a fresh daily low around the $22.75 region.
Looking at the technical picture, the last move higher from near the $22.00 level faltered ahead of the 100-day SMA. The mentioned barrier, currently around the $23.20 area, is followed by horizontal resistance at $23.40-$23.45. This region should act as a pivotal point for investors and help determine the short-term trend for XAG/USD.
Meanwhile, the technical indicators on the daily chart, although they have been recovering from lower levels, have yet to confirm a bullish bias for XAG/USD. This, in turn, warrants some caution before confirming that the recent rejection drop from the 200 SMA is over.
From current levels, any further decline is likely to find immediate support near the $22.65 region, ahead of the $22.40 area, which if broken would expose the round $22.00 level. Sustained weakness should pave the way for a further drop and drag XAG/USD to challenge double bottom support around the $21.40 area.
On the other hand, the bulls are likely to wait for a convincing break above the $23.45 hurdle before positioning for any further gains. XAG/USD could accelerate the momentum towards the $24.00 recovery. The momentum could widen further and allow the bulls to challenge the yearly high around the $24.70 zone touched on Jan 20.
silver daily chart
Silver technical levels
Source: Fx Street
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