- Silver gains traction for the second day in a row and climbs to a more than five-month peak.
- The technical setup favors bullish traders and supports the prospect of further gains.
- A convincing break below the $21.00 mark is needed to negate the positive outlook.
Silver builds on a breakout of the very important 200-day SMA the previous day , and rose for the second day in a row on Friday. In early European trade, the white metal jumped to a more than five-month high, but struggled to find acceptance above the $22.00 round-figure mark. However, XAGUSD held on to its intraday gains and is currently trading around the $21.85-21.90 area, still up nearly 0.90% on the day.
An overnight rebound from sub-$21.00 levels followed by strength above a technically important moving average supports further near-term appreciation Prospects. That said, the RSI (14) on the daily chart is on the verge of entering overbought territory and caution is warranted for aggressive bullish traders. This makes it prudent to wait for a near-term consolidation or modest pullback before positioning for additional gains.
Nonetheless, XAGUSD seems poised to break the $22.00 mark and may aim to test the next relevant barrier near the $22.45-$22.50 area . The aforementioned area marks an area of high supply that could be a difficult problem for the bulls to overcome. However, some follow-through buying would mark a fresh breakout and pave the way for a recovery towards the $23.00 round. This momentum could eventually push spot prices to May highs around the $23.25-$23.30 area.
On the other hand, the daily low, near the $21.45 area, which coincides with the 200 DMA breakout, should protect the immediate Downside. Any further pullback can be seen as a buying opportunity and remains limited near $21.00. A convincing break below could spark some technical selling and drag XAGUSD towards the $20.40 support area. Failure to defend the aforementioned support level could change the near-term bias in favor of bearish traders.
Silver Daily Chart
Key level to watch
The information on these pages contains forward-looking statements that involve risks and uncertainties. The markets and instruments described on this page are for informational purposes only and should not be taken as a recommendation to buy or sell these assets in any way. You should conduct your own thorough research before making any investment decision. FXStreet does not warrant in any way that this information is free of errors, errors or material misstatements. It also does not guarantee that the information is timely. Investing in public markets involves a number of risks, including loss of all or part of your investment, and emotional distress. All risks, losses and costs associated with investing, including the entire loss of principal, are borne by you. The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of FXStreet or its advertisers. The author is not responsible for the information at the end of links published on this page.
Unless otherwise expressly mentioned in the text of the article, at the time of writing, the author is in any stock mentioned No positions are in this article and have no business relationship with any of the companies mentioned. Other than from FXStreet, the author did not receive any compensation for writing this article.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness or suitability of this information. FXStreet and the author shall not be liable for any errors, omissions or any loss, injury or damage arising out of this information and its display or use. Errors and omissions excluded.
The author and FXStreet are not registered investment advisors and nothing in this article is investment advice.
