Silver Price Analysis: XAG/USD bulls have the upper hand above $21.65-70 confluence
NEW YORK (March 17) Silver attracts fresh buying on the last day of the week and maintains its bid tone through the first half of the European session, though struggles to capitalize on the move beyond the $22.00 round-figure mark.
From a technical perspective, the two-way price moves in a familiar range witnessed over the past few sessions constitute the formation of a rectangle. Against the backdrop of the recent strong recovery from sub-$20.00 levels, or a four-month low touched last week, this might still be categorized as a bullish consolidation phase. Furthermore, acceptance above the $21.65-$21.70 confluence adds credence to the positive outlook and supports prospects for a further near-term appreciating move for the XAG/USD.
The aforementioned area comprises the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibonacci retracement level of the downfall from the $24.65 area, or a multi-month peak touched in February. This should now act as a strong base for the XAG/USD and help limit the immediate downside. That said, some follow-through selling, leading to a break below the trading range support near the mid-$21.00s, might negate the positive outlook and pave the way for a slide towards the $21.00 mark.
The latter coincides with the 23.6% Fibo. level, which if broken decisively will shift the near-term bias back in favour of bearish traders. The XAG/USD might then turn vulnerable to accelerate the slide towards the $20.55-$20.50 intermediate support en route to the $20.00 psychological mark. The downward trajectory could get extended further and drag spot prices to the next relevant support near the $19.60 region. The white metal could eventually drop to the $19.00 mark for the first time since early November 2022.
On the flip side, momentum back above the $22.00 round figure might confront stiff resistance near the $22.25-$22.35 region, marking the 50% Fibo. level and the overnight swing high. The subsequent move up could push the XAG/USD beyond the $22.55-$22.60 supply zone, towards testing the 61.8% Fibo. level, just ahead of the $23.00 mark. A sustained strength beyond the latter will be seen as a fresh trigger for bullish traders and should pave the way for a meaningful upside for the white metal in the near term.
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