Silver Price Analysis: XAG/USD continues with its struggle to find acceptance above 200-day SMA

• Silver drifts lower on Tuesday and snaps a two-day winning streak to over a one-week high.
• The mixed technical setup warrants some caution before placing aggressive directional bets.
• A sustained strength beyond the $23.60-70 area to support prospects for any further gains.

Silver (XAG/USD) extends the previous day's retracement slide from the $23.60-$23.70 horizontal resistance and remains under some selling pressure through the first half of the European session on Tuesday. The white metal currently trades around the $23.20-$23.15 region, down over 0.50% for the day, and for now, seems to have snapped a two-day winning streak.

From a technical perspective, the recent repeated failures to find acceptance above the 200-day Simple Moving Average (SMA) and the subsequent pullbacks from the $23.60-$23.70 supply zone warrant caution for bullish traders. That said, oscillators on the daily chart are holding in the positive territory and support prospects for the emergence of some dip-buying. Hence, it will be prudent to wait for some follow-through selling below the $23.00 mark before positioning for any further depreciating move.

The XAG/USD might then accelerate the fall towards testing last week's swing low, around the $22.45 region. This is closely followed by the $22.30-$22.25 horizontal resistance breakpoint now turned support, which if broken decisively will be seen as a fresh trigger for bearish traders. The downward trajectory could then get extended further towards the $22.00 round-figure mark en route to the $21.70 horizontal support.

On the flip side, momentum beyond the $23.35 region (200-day SMA) might continue to confront hurdle near the $23.60-$23.70 zone. A sustained strength beyond should allow the XAG/USD to reclaim the $24.00 mark and climb further towards testing the next relevant barrier near the $24.20 region. Some follow-through buying will confirm a fresh breakout and allow the white metal to make a fresh attempt towards conquering the $25.00 psychological mark.

Silver daily chart

Technical levels to watch