Silver Price Analysis: XAG/USD corrects from over one-week high, slides to $22.75 area

• Silver witnessed some selling on Tuesday and eroded a part of the overnight strong gains.
• A convincing break below the $22.40 support zone would pave the way for further losses.
• Bulls might wait for sustained strength beyond the $23.00 mark before placing fresh bets.

Silver struggled to find acceptance above the $23.00 mark, or capitalize on the previous day's strong gains to over one-week high and witnessed some selling on Tuesday. The intraday downfall extended through the early European session and dragged the white metal to a fresh daily low, around the $22.80-$22.75 region in the last hour.

Looking at the technical picture, the latest leg up from the vicinity of the $22.00 mark faltered ahead of the 100-day SMA. The mentioned barrier, currently around the $23.20 area, is followed by the $23.40-$23.45 horizontal resistance. The latter should act as a pivotal point for traders and help determine the near-term trend for the XAG/USD.

Meanwhile, technical indicators on the daily chart – though have been recovering from lower levels – are yet to confirm a bullish bias for the XAG/USD. This, in turn, warrants some caution before confirming that the recent sharp rejection slide from the 200-day SMA has run its course and positioning for any further appreciating move.

From current levels, any subsequent slide is likely to find immediate support near the $22.65 region ahead of the $22.40 area, which if broken would expose the $22.00 round figure. Sustained weakness below should pave the way for a further decline and drag the XAG/USD towards challenging the double-bottom support, around the $21.40 zone.

On the flip side, bulls are likely to wait for a convincing break through the $23.45 hurdle before positioning for any further gains. The XAG/USD might then accelerate the momentum towards reclaiming the $24.00 mark. The momentum could further get extended and allow bulls to challenge the YTD high, around the $24.70 area touched on January 20.

Silver daily chart

Technical levels to watch