Silver Price Analysis: XAG/USD holds above 100/200-hour SMAs confluence support near $22.70-65

• Silver attracts some buyers for the third successive day, though lacks bullish conviction.
• The intraday technical setup favours bulls and supports prospects for additional gains.
• A convincing break below the $22.70-65 confluence might negate the positive outlook.

Silver trades with a positive bias for the third successive day on Monday, albeit lacks any follow-through buying and remains confined in a familiar range below the $23.00 mark through the early European session. The intraday technical setup, meanwhile, favours bullish traders and supports prospects for additional gains.

The outlook is reinforced by the fact that the XAG/USD is holding above the $22.70-$22.65 confluence, comprising the 200-hour and the 100-hour Simple Moving Averages (SMAs). This, along with positive technical indicators on the hourly charts, suggests that the path of least resistance for the white metal is to the upside. That said, oscillators on the daily chart – though have been recovering – are yet to confirm the positive outlook and warrant some caution for bulls.

Hence, any subsequent strength back above the $23.00 mark is more likely to confront a stiff barrier near the very important 200-day SMA, currently pegged around the $23.25 region. This is closely followed by resistance near the $23.60-$23.60 horizontal zone, above which a fresh bout of a short-covering has the potential to lift the XAG/USD towards the $24.00 round figure. The latter coincides with the 100-day SMA and should act as a pivotal point for short-term traders.

On the flip side, a sustained break below the aforementioned $22.70-$22.65 confluence support might prompt some technical selling and expose the multi-month low, around the $22.10 region touched in June. Some follow-through selling below the $22.00 mark will be seen as a fresh trigger for bearish traders. The XAG/USD might then accelerate the slide towards the $21.55-$21.50 area en route to the $21.00 round figure. The next relevant support is pegged near the $20.60 area, below which the downward trajectory could get extended towards challenging the $20.00 psychological mark.

Silver 1-hour chart

Technical levels to watch