Silver Price Forecast: XAG/USD resumes its uptrend and tests $38.45 resistance

LONDON (July 21) Silver (XAG/USD) is trading higher, following a slight decline on Friday. The precious metal is dragging support from a somewhat softer US Dollar and the retreating US Treasury yields to extend gains and test resistance at the $38.45 area at the time of writing.

Investors’ sentiment has improved somewhat in a relatively calm start to the week on the European market. A moderate risk appetite is weighing on the US Dollar Index, and lifting precious metals, favoured by their inverse correlation with US Bond yields and the US Dollar.

Technical Analysis: The longer-term bullish bias remains in play

XAG/USD´s reversal from long-term highs above $39.00 found support above the top of a previous bullish channel at the $37.55-$37.65 area last week. It has been moving higher for three of the previous four trading days.

The pair is now testing resistance at $38.45 (the July 15 and 18 highs), which closes the path to the July 14 top at $39.14. Above here, the 161.8% Fibonacci extension of last week’s pullback is at the $40.00 psychological area.

A rejection from current levels might find support at the mentioned trendline, now at $37.90, ahead of the July 15, 16, and 17 lows, which meet the 39.8% retracement of the June 24-July 14 rally, at $37.60.

FXStreet