Silver Price Analysis: XAG/USD pares intraday losses, bulls retain control above 50% Fibo. level

• Silver finds support near 50% Fibo. and stalls its modest intraday slide from a multi-week peak.
• The technical setup favours bullish traders and supports prospects for further near-term gains.
• A convincing break below the $21.50 area negates the positive outlook for the white metal.

Silver retreats from its highest level since February 03 touched on the first day of a new week and remains on the defensive through the early European session. The white metal, however, manages to recover a part of its intraday losses and seems poised to prolong its recent appreciating move witnessed over the past two weeks or so.

Last week's sustained breakout through the $21.65-$21.70 confluence resistance was seen as a fresh trigger for bullish traders. Furthermore, a subsequent move and acceptance above the 50% Fibonacci retracement level of the recent sharp pullback from a multi-month peak support prospects for additional gains. Adding to this, bullish oscillators on 4-hour and daily charts suggest that the path of least resistance for the XAG/USD is to the upside.

Hence, some follow-through strength towards testing the 61.8% Fibo. level, around the $22.80-$22.85 region, looks like a distinct possibility. The momentum could get extended beyond the $23.00 mark, towards testing the next relevant hurdle near the $23.25-$23.35 zone en route to the $24.00 round-figure mark. Bullish traders might eventually aim to challenge the multi-month top, around the $24.65 zone touched in early February.

On the flip side, the 50% Fibo. level, around the $22.25 region, helps limit the intraday downtick and should now act as a pivotal point. Any further decline is likely to attract fresh buying near the $22.00 mark and remains limited near the $21.65-$21.70 confluence resistance breakpoint. The latter comprises the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibo. level, which if broken might negate the positive bias.

Some follow-through selling below the $21.50 area could expose the $21.00 mark, representing the 23.6% Fibo. level. The XAG/USD might then turn vulnerable to accelerate the slide towards the $20.55-$20.50 intermediate support en route to the $20.00 psychological mark. The downward trajectory could get extended further and drag spot prices to the next relevant support near the $19.60 region.

Silver 4-hour chart

Key levels to watch