Silver Price Analysis: XAG/USD slides back closer to 38.2% Fibo., around $24.00 mark
- Silver retreats further from a nearly one-month high touched on Friday.
- The technical setup supports prospects for the emergence of dip-buying.
- A break below the $23.60-55 confluence will negate the positive outlook.
Silver extends Friday’s retracement slide from the $24.50-$24.55 area, or its highest level since May 11 and continues losing ground on the first day of a new week. The steady descent drags the white metal to the 38.2% Fibonacci retracement level of the downfall witnessed in May, around the $24.00 round-figure mark during the Asian session.
The said handle represents a strong horizontal resistance breakpoint and should act as a pivotal point for intraday traders. Any subsequent fall, meanwhile, could be seen as a buying opportunity and remain limited near the $23.60-$23.55 confluence – comprising the 200-period SMA on the 4-hour chart and the 23.6% Fibo. level. Against the backdrop of positive oscillators on daily/4-hour charts, the said area should act as a strong base for the XAG/USD and limit the downside.
That said, a convincing break below the aforementioned confluence support will shift the bias in favour of bearish traders and prompt aggressive technical selling. The XAG/USD might then accelerate the fall towards the $22.00 mark and then slide further towards challenging a nearly two-month low, around the $22.70-$22.65 region touched in May. The downward trajectory could get extended further towards the next relevant support near the $22.00 round figure.
On the flip side, bullish traders might now wait for some follow-through buying beyond the $24.45-$24.50 area, or the 50% Fibo. level, before placing fresh bets and positioning for an extension of the recent rally witnessed over the past two-and-half weeks or so. The XAG/USD might then aim to reclaim the $25.00 psychological mark and climb further towards the $25.35-$25.40 intermediate hurdle. Bulls might then make a fresh attempt towards conquering the $26.00 round figure.