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| XAG/USD Bulls Maintain Upper Hand with Positive Traction above Key Levels |
Silver prices remained in a multi-day trading range, although the bulls maintained the upper hand above the confluence of $21.65-$21.70. The metal maintained a positive bias despite struggling to capitalize on the move beyond the $22.00 mark. A convincing break below $21.00 would be required to negate the near-term bullish bias.
From a technical standpoint, the recent two-way price moves formed a rectangle in the chart, which could be categorized as a bullish consolidation phase given the strong recovery from sub-$20.00 levels. The XAG/USD’s positive outlook is supported by the acceptance above the $21.65-$21.70 confluence area, which 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, a multi-month peak in February.
The $21.65-$21.70 region should act as a strong base for XAG/USD, limiting immediate downside. However, a break below the mid-$21.00s trading range support might negate the positive outlook and push the white metal towards the $21.00 mark, coinciding with the 23.6% Fibonacci level, where the near-term bias might shift in favour of bearish traders.
If XAG/USD turns bearish, it could accelerate towards the $20.55-$20.50 intermediate support en route to the $20.00 psychological mark, where it may drop to the $19.60 region. On the other hand, momentum back above the $22.00 round figure may face stiff resistance near the $22.25-$22.35 region, marking the 50% Fibonacci level and the overnight swing high.
If the XAG/USD breaks above $22.60, it might test the 61.8% Fibonacci level just ahead of the $23.00 mark. A sustained strength beyond the latter could trigger bullish traders, leading to meaningful upside for the white metal in the near term. Overall, the bullish consolidation phase continues for XAG/USD, and further gains might be on the horizon.
