- Silver gains strength for the second day in a row and recovers further from the monthly low.
- The breakout of the 200-period SMA on the 4-hour chart should allow the bulls to conquer the $22.00 level.
- A sustained weakness below $21.00 would change the bias in favor of the bears.
Silver price (XAG/USD) has built on Friday’s strong recovery move from the $20.60 zone, or the lowest level since May 13, and has gained continuation traction on the first day of trading. a new week. This is the second consecutive day of positive movement and has brought XAG/USD back closer to $21.50 during the early part of the European session.
From a technical point of view, any further move higher is likely to face stiff resistance near the 200-period SMA on the 4hrs chart, currently around the $21.65-$21.70 zone. Some continuation buying should allow XAG/USD to build on the momentum and recapture the $22.00 level.
Sustained strength above the latter region would negate any short-term negative outlook and be seen as a new trigger for the bulls. XAG/USD could then accelerate the move towards intermediate resistance near the $22.30 area on the way to the $22.50-$22.60 hurdle and the $23.00 level.
On the other hand, the low around the $21.10 area seems to defend the immediate fall. A convincing break below that level, leading to a further break of the $21.00-$20.90 support, would suggest that the rally attempt has run out and change the bias in favor of the bears.
The next relevant support is near the monthly low around the $20.60 area touched on Friday, before the yearly low around the $20.45 area. The move down could extend and drag XAG/USD to challenge the psychological $20.00 level for the first time since July 2020.
Silver 4 hour chart
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Silver technical levels
Source: Fx Street
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