Silver Price Analysis: XAG/USD bulls continue to show some resilience below 38.2% Fibo. level

• Silver catches fresh bids on Wednesday and recovers from over a two-month low set the previous day.
• The technical setup favours bearish traders and supports prospects for a further depreciating move.
• A convincing break below the $22.00 mark will reaffirm the negative outlook and prompt fresh selling.

Silver attracts fresh buying on Tuesday and moves away from over a two-month low, around the $22.00 round figure touched the previous day. The white metal sticks to its modest intraday gains through the early European session and trades near the top end of its daily range, around the $22.35 region.

From a technical perspective, the XAG/USD once again showed some resilience below the 38.2% Fibonacci retracement level of the recent rally from October 2022. The subsequent bounce warrants some caution before positioning for a further near-term depreciating move. That said, oscillators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone. This, in turn, favours bearish traders.

A convincing break below the $22.00 mark will reaffirm the negative outlook and drag the XAG/USD to the next relevant support near the 100-day SMA, around the $21.70-$21.65 region. This is followed by 50% Fibo. level, around the $21.35 area, below which the metal could fall to the $21.00 level en route to the 61.8% Fibo. level, around the $20.60-$20.55 zone. The descending trend could get extended towards testing the $20.00 psychological mark.

On the flip side, any subsequent move-up is likely to attract fresh sellers near the $22.70 region and remain capped near the $23.00 confluence support breakpoint. The said handle comprised 23.6% Fibo. level and the lower end of a nearly two-month-old trading range and should act as a tough nut to crack for the XAG/USD bulls. That said, a sustained move beyond might offset the negative outlook and shift the near-term bias in favour of bullish traders.

Silver daily chart

Key levels to watch