Silver Price Analysis: XAG/USD bulls have the upper above $23.80-85 resistance breakpoint

(August 31) Silver continued with its struggle to build on the momentum beyond the 38.2% Fibonacci level of the $26.00-$22.17 fall and once again witnessed a modest pullback from the $24.20 area. The white metal, however, has managed to hold its neck above the $24.00 round-figure mark.

Given Friday's move beyond the $23.80-85 supply zone, the bias still seems tilted in favour of bullish traders. The constructive outlook is reinforced by the fact that oscillators on hourly charts are holding in the positive territory and still far from being in the overbought zone.

Meanwhile, technical indicators on the daily chart – though have recovered from the bearish territory – are yet to confirm the positive bias. This warrants some caution for bulls and makes it prudent to wait for some follow-through buying before positioning for any further gains.

From current levels, the $24.20 region now seems to have emerged as an immediate hurdle ahead of the 50% Fibo. level, around the $24.35-40 region. A sustained strength above could lift the XAG/USD to the $24.75-80 area, or the 61.8% Fibo., en-route the key $25.00 psychological mark.

On the flip side, any meaningful slide below the $23.85-80 zone now seems to find decent support near the 23.6% Fibo. level, around the $23.45-40 region. Sustained weakness below might turn the XAG/USD vulnerable to accelerate the fall further towards the $23.00 round figure.

Failure to defend the mentioned support levels will be seen as a fresh trigger for bearish traders and set the stage for a slide towards intermediate support near mid-$22.00s. The XAG/USD could slide further to challenge YTD lows, around the $22.20-15 region touched earlier this month.

FXStreet