- Silver gains ground for the second day in a row and recovers from a multi-month low.
- The intraday technical setup favors the bulls and supports further earnings prospects.
- A weakness would trigger a drop below the 23.6% Fibonacci negating the positive bias and exposing $22.00.
Silver is supported by Friday’s modest rebound from the $22.10 area, or its lowest level since March 17, and gets strong follow-through traction on the first day of a new week. The bullish trajectory is maintained during the early stages of the European session and lifts the white metal to a three-day high, around the $22.85 zone in the last hour.
From a technical standpoint, the XAG/USD has broken above the 100 hourly SMA again and is currently sitting around the 38.2% Fibonacci retracement level of the decline seen over the past week or so. A sustained strengthening could trigger a new short rally and take the commodity beyond $23.00 to test the 50% Fibonacci level around the $23.15 area.
The rally could extend to the confluence of $23.35 $23.40, which comprises the 200 hourly SMA and the 61.8% Fibonacci level, which should now act as a reversal point. With oscillators on the daily chart holding in negative territory, bulls could wait for buying beyond that barrier before confirming that XAG/USD has bottomed ahead of the $22.00 signal and positioning. for new earnings.
On the other hand, if it breaks back below the 23.6% Fibonacci level around the $22.60 area, it will expose the multi-month low around the $22.10 area. Continuation of selling below $22.00 would be another trigger for bears and would cause XAG/USD to accelerate its decline towards the $21.70-$21.65 support zone. The bearish trajectory could extend further towards the $21.25 support on the way to the $21.00 round figure.
The next relevant support lies near the $20.50 zone, below which XAG/USD could eventually aim to challenge the yearly low, levels just below the key psychological $20.00 level hit in March.
Silver 1 hour chart
Key levels to watch
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
