- Silver attracts some dip-buying ahead of the $23.00 round figure, albeit lacks follow-through.
- The technical setup favours bullish traders and supports prospects for a further positive move.
- A sustained strength beyond the $23.60-70 supply zone is needed to reaffirm the bullish bias.
Silver (XAG/USD) reverses an intraday dip to the $23.10 area and climbs to the top end of its daily trading range during the first half of the European session on Monday. Bulls still await a sustained strength beyond the very important 200-day Simple Moving Average (SMA) before placing fresh bets.
Any subsequent move up, however, is more likely to confront stiff resistance near the $23.60-$23.70 supply zone, which should act as a key pivotal point. With oscillators on the daily chart holding in the positive territory, a sustained strength beyond will be seen as a fresh trigger for bullish traders and pave the way for some meaningful upside.
The XAG/USD might then aim to surpass the $24.00 mark and test the next relevant hurdle near the $24.20-$24.25 zone. The momentum could get extended further and allow bulls to make a fresh attempt to conquer the $25.00 psychological mark before the white metal eventually climbs to the July swing high, around the $25.20-$25.25 zone.
On the flip side, any meaningful slide below the $23.00 mark is more likely to find decent support and remain limited near the $22.60-$22.50 horizontal support. A convincing break below the latter will shift the bias back in favour of bearish traders and drag the XAG/USD to the $22.00 mark en route to the $21.70 horizontal support zone.
Some follow-through selling will expose the $21.35-$21.30 support, below which the XAG/USD seems all set to accelerate the fall further below the $21.00 mark, towards the $20.70-$20.65 area, or a seven-month low touched in October.
Silver daily chart
Technical levels to watch
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