Silver Price Analysis: XAG/USD remains trapped below $23

• Silver's upside attempts capped below $22.80.
• US dollar's strength weighs on precious metals.
• XAG/USD: Moving sideways between $22.20 and $23.15.

Silver opened the week on a slightly positive tone although it was unable to extend past $22.80, amid a broad-based US dollar strength. The precious metal has retreated to the $22.65 area during the US trading session to remain practically unchanged on daily charts.

US dollar strength weighs on precious metals

Silver and precious metals, in general, remain on the defensive against a firmer US dollar with the market bracing for the official announcement of bonds-buying tapering by the Federal Reserve. The US Dollar Index has ticked up about 0.15% on Monday, to reverse the previous two days’ losses and approach year-to-date highs at 94.50

The US dollar has appreciated across the board on Monday. The investors have assumed that the discouraging US Non-Farm Payrolls report seen last Friday is unlikely to deter the Fed from announcing their plan to start rolling back the monetary stimulus at their next monetary policy meeting in November.

XAG/USD: consolidating between $22.20 and $23.15

From a technical perspective, the pair has been consolidating within a narrow range over the last week. On the upside, XAG/USD should breach September 22, October 8 highs, at $23.15 to increase bulls’ confidence, and attempt 14, 16 September highs, at $24.00 ahead of September 3 high at $24.87.

On the downside, immediate support lies at $22.15 (October 6 low) and below here, $21.37 (September 29 low) and 20.75 (50% Fibonacci retracement of the March-August 2020 rally.

Technical levels to watch