- Silver turns positive for the fourth straight day and climbs back closer to a multi-week high.
- The technical setup seems tilted in favour of bulls and supports prospects for further gains.
- Bulls might wait for a move beyond the $23.30-$23.35 confluence before placing fresh bets.
Silver (XAG/USD) reverses an intraday dip to the $22.85 area and builds on its intraday upward trajectory through the first half of the European session on Friday. The white metal currently trades around the $23.20 region, up nearly 0.50% for the day, and seems poised to prolong its recent goodish recovery from a seven-month low touched on October 3.
From a technical perspective, the emergence of some dip-buying near the 50% Fibonacci retracement level of the August-October downfall validates the constructive outlook for the XAG/USD. Furthermore, oscillators on the daily chart have just started gaining positive traction and support prospects for a further appreciating move. That said, it will still be prudent to wait for a sustained move beyond the $23.30-$23.35 confluence hurdle – comprising the 100-day and the 200-day Simple Moving Averages (SMAs) and the 61.8% Fibo. level – before placing fresh bullish bets.
The XAG/USD might then climb to the next relevant resistance near the $23.75-$23.80 region (September 22 high) and then aim to reclaim the $24.00 round figure for the first time since early September. The positive momentum could get extended further towards the $24.30-$24.35 resistance zone en route to the August monthly swing high, around the $25.00 psychological mark.
On the flip side, the 50% Fibo. level, around the $22.85 region, might continue to protect the immediate downside ahead of the $22.70-$22.65 horizontal support. This is followed by the weekly trough, around the $22.40-$22.35 zone, which nears the 38.2% Fibo. level and should act as a key pivotal point. A convincing break below might shift the near-term bias back in favour of bearish traders and prompt aggressive technical selling around the XAG/USD.
Silver might then turn vulnerable to accelerate the fall further below the $22.00 mark, towards the 23.6% Fibo. level, around the $21.75 area. The subsequent downfall has the potential to drag the XAG/USD to the $21.35-$21.30 intermediate support en route to the $21.00 mark and back towards retesting a seven-month low, around the $20.70-$20.65 zone, or a seven-month low touched on October 3.
Silver daily chart
Technical levels to watch