Silver Price Analysis: XAG/USD flirts with daily high, upside potential seems limited

• Silver attracts some buying on Monday and snaps a six-day losing streak to a two-week low.
• Bearish oscillators on short-term charts warrant caution before positioning for further gains.
• Sustained strength beyond the $20.00 mark is needed to negate the near-term negative bias.

Silver gains some positive traction on the first day of a new week and moves away from over a two-week low, around the $18.00 mark touched on Friday. The white metal maintains its bid tone heading into the European session and is currently flirting with the daily peak, near the $18.50-$18.45 region.

The XAG/USD, for now, seems to have snapped six straight days of a losing streak and stalled its recent sharp rejection slide from the 200-day EMA, or its highest level since late June. Any subsequent move up, however, is likely to confront stiff resistance near the $18.90-$19.00 area, which should act as a pivotal point for intraday traders.

Sustained strength beyond might trigger a short-covering rally and lift the XAG/USD back towards the $19.70-$19.80 supply zone. Meanwhile, oscillators on the daily chart have just started drifting into negative territory. Moreover, bearish technical indicators on the 4-hour chart warrants caution before positioning for further gains.

That said, some follow-through buying beyond the $20.00 psychological mark will negate any near-term negative outlook and pace the way for a further near-term appreciating move. The XAG/USD might then climb to the $20.50 intermediate resistance en route to the $21.00 round figure and the 200-day EMA, currently around the $21.15 region.

On the flip side, the $18.00 mark now seems to have emerged as immediate strong support, which if broken decisively will be seen as a fresh trigger for bearish traders. The next relevant support is pegged near the YTD low, around the $17.55 area touched in September, below which the XAG/USD could slide to test the $17.00 round figure.

Silver daily chart

Key levels to watch