Silver price (XAG/USD) takes the bids to refresh a two-week high near $19.10 during the early Monday morning in Europe. In doing so, the bright metal crosses the 21-DMA while printing the four-day uptrend.

The 21-DMA breakout also takes clues from the bullish MACD signals to challenge the support-turned-resistance line from July 14, close to $19.15 at the latest.

It should, however, be noted that the XAG/USD bulls will need validation from a seven-week-old horizontal resistance area and a downward sloping resistance line from early May, respectively near $19.50 and $20.10, to retake control.

Technical indicators on the daily chart - though have been recovering from the negative territory - are yet to confirm a bullish bias. Moreover, RSI (14) on the 4-hour chart is already flashing slightly overbought conditions. This makes it prudent to wait for some consolidation or a modest pullback before positioning for the next leg up.

From current levels, any meaningful slide is likely to find decent support near the $18.60-$18.50 region ahead of the descending trend-channel breakpoint, currently around the $18.20-$18.15 zone. Some follow-through selling below the $18.00 mark will negate the positive bias and suggest that the corrective bounce has run out of steam.

On the flip side, momentum beyond the $19.00 round figure is likely to confront stiff resistance near the 200-period SMA on the 4-hour chart. The said barrier, currently around the $19.35 region, should now act as a key pivotal point. Sustained strength beyond will reaffirm the constructive outlook and pave the way for further upside.

Limited upside expected on Silver

Sep 12 2022