Silver Price Analysis: XAG/USD bulls have the upper hand above $22.00/200-hour SMA

• Silver finds support near $22.00 and stalls this week’s pullback from a multi-month high.
• The technical set-up favours bullish traders and supports prospects for additional gains.
• A sustained break below $21.00 will negate the near-term positive bias for the XAG/USD.

Silver attracts fresh buyers on Wednesday and steadily climbs back closer to the mid-$22.00s during the mid-European session.

Looking at the broader picture, this week's sharp retracement slide from the highest level since late April stalls near the $22.00 round-figure mark. The said handle coincides with the 200-hour SMA and should act as a pivotal point, which if broken decisively will set the stage for a deeper corrective decline.

The XAG/USD might then accelerate the fall towards the $21.40 support zone. This is closely followed by the very important 200-day SMA, around the $21.30-$21.25 region, and the $21.00 mark. The latter should act as a strong base for spot prices, which if broken decisively will negate the near-term positive outlook.

That said, oscillators on the daily chart are holding comfortably in the bullish territory and have again started gaining positive traction on hourly charts. This, in turn, supports prospects for the emergence of some dip-buying at lower levels, which should help limit any meaningful near-term fall for the XAG/USD.

Meanwhile, any subsequent move up beyond the overnight swing high, around the $22.60 area, is likely to confront stiff resistance near the $23.00 mark. A sustained strength beyond should lift the XAG/USD to the multi-month peak, around the $23.50-$23.55 zone. Some follow-through buying should pave the way for additional gains.

Bulls might then aim to reclaim the $24.00 round-figure mark for the first time since April. The positive momentum could get extended and lift the XAG/USD further towards the next relevant hurdle around the $24.25-$24.30 zone en route to the $24.55-$24.60 region.

Silver 1-hour chart

Key levels to watch