Silver Price Analysis: XAG/USD bounces off over one-week low, defends $24.50 support

• Silver finds support near mid-$24.00s and reverses an intraday dip to over a one-week low.
• The mixed oscillators on daily/hourly charts warrant caution for aggressive bullish traders.
• A convincing break below the 200-day SMA is needed to negate the near-term positive bias.

Silver rebounds from over a one-week low touched this Monday and trades with a mild positive bias, around the $24.65 region during the early European session. The white metal, for now, seems to have stalled a two-day corrective decline from the $24.25 area, or its highest level since May 11 set last Thursday.

From a technical perspective, the XAG/USD manages to defend the $24.50 strong horizontal resistance breakpoint, now turned support. The said area should now act as a pivotal point, which if broken decisively might prompt some technical selling and drag Silver towards the $24.00 mark. The downward trajectory could get extended further towards the $23.65-$23.60 support en route to the $23.20-$23.15 region.

Some follow-through selling, leading to a subsequent fall below the $23.00 round figure, which nears the very important 200-day Simple Moving Average (SMA), could negate any positive outlook and shift the near-term bias in favour of bearish traders. The XAG/USD might then turn vulnerable to accelerate the fall below the $22.75-$22.70 area, towards challenging the multi-month low, around the $22.15-$22.10 area.

Meanwhile, oscillators on the daily chart are holding comfortably in the positive territory and favour bullish traders. That said, technical indicators on hourly charts are yet to confirm the bullish outlook and warrant caution before positioning for a further intraday appreciating move. Hence, any subsequent move up might attract some sellers near the $25.00 psychological mark and remain capped near last week's swing high, around the $25.25 area.

Some follow-through buying, however, should allow the XAG/USD to surpass the $25.50-$25.55 intermediate hurdle and aim to reclaim the $26.00 round figure. This is closely followed by the YTD peak, around the $26.10-$26.15 area touched in May, which if cleared will set the stage for an extension of the recent upward trajectory witnessed over the past month or so.

Silver daily chart

Key levels to watch