Silver Price Analysis: XAG/USD refreshes two-week high, flirts with $22.20-30 support breakpoint

• Silver gains some follow-through traction on Thursday and advances to a near two-week high.
• The technical setup warrants some caution for bulls and before positioning for additional gains.
• Weakness below the $21.60-55 area will suggest that the recovery momentum has lost steam.

Silver scales higher for the second successive day on Thursday – also marking the fourth day of a positive move in the previous five – and touches a near two-week high during the early part of the European session. The white metal, however, remains below the $22.30 strong horizontal support breakpoint, now turned resistance, warranting some caution for bullish traders.

Moreover, neutral technical indicators on the daily chart make it prudent to wait for some follow-through buying beyond the aforementioned support-turned-resistance before positioning for any further appreciating move. The subsequent short-covering rally should allow the XAG/USD to reclaim the $23.00 mark. The momentum could get extended further towards challenging the very important 200-day Simple Moving Average (SMA), currently pegged around the $23.35 area.

The latter should act as a key pivotal point, which if cleared decisively will suggest that the XAG/USD has bottomed out in the near term and pave the way for an extension of the recent recovery move witnessed over the past week or so. The white metal might then climb to the $23.75-$23.80 region (September 22 high) en route to the $24.00 round figure and the $24.30-$24.35 hurdle.

On the flip side, the $21.85-$21.80 zone now seems to have emerged as an immediate strong support. The next relevant support is pegged near the $21.60-$21.55 region, or the weekly low. Some follow-through selling could drag the XAG/USD back towards a multi-day-old trading range resistance breakpoint, now turned support, around the $21.3-$21.30 region en route to the $21.00 round figure mark and a near seven-month low, around the $20.70-$20.65 region touched last week.

Silver daily chart

Technical levels to watch