XAG/USD bulls are taking a breather near the 50-day SMA hurdle near the mid-$20.00 area

  • Silver appears to be digesting its recent strong rally to a one-month high set earlier this Monday.
  • Oscillators on the daily chart favor bullish traders and support prospects for additional gains.
  • A slightly overbought RSI on the 4-hour chart warrants a consolidation ahead of the next upward move.

Silver is struggling to capitalize on last week’s strong bullish move, oscillating between tepid gains and marginal losses on the first day of a new week, still in a range below the mid-$20.00 or 1-month high set earlier this year reached on Monday.

From a technical perspective, XAG/USD has struggled to find acceptance above the 50% Fibonacci retracement level of the $22.52 to $18.15 slide. Furthermore, the strong positive momentum is flat near the 50-day SMA. The latter should now act as an important pivot, helping traders determine the next leg of a directional move.

Meanwhile, the daily chart’s oscillators have just started to gain positive traction, supporting the prospects for further near-term appreciation. However, the daily chart’s RSI (14) is already indicating overbought conditions. Therefore, it is advisable to wait before the next XAG/USD rise.

Spot prices could then aim to outperform the 61.8% Fibo. level, around the $20.85 region, and reclaim the round number of $21.00. Momentum could extend further and XAG/USD could move towards the next relevant barrier nearby on the way to $22.00 and the 100-day SMA, currently around the $22.15 zone of the $21.40-$21.50 range.

On the downside, any significant slide in prices now seems to find decent support near the psychological $20.00 level. This is followed by the 38.2% Fibo. Levels around the $19.80 region. A convincing break below the latter would indicate that the recovery from the YTD low has lost momentum and shift the bias in favor of bearish traders.

Silver daily chart

key levels to observe

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