Silver Price Analysis: XAG/USD remains confined in a range above mid-$23.00s

• Silver was seen oscillating in a narrow trading band through the early European session.
• The overnight sustained break through the $23.40-45 confluence favours bullish traders.
• Some follow-through buying beyond the $24.00 mark will reaffirm the positive outlook.

Silver oscillated in a range through the first half of the European session and was last seen trading around the $24.60 region, nearly unchanged for the day.

Looking at the technical picture, the overnight strong move up pushed the XAG/USD beyond a confluence hurdle near the $23.45-50 region. The mentioned barrier comprised 100-hour SMA, the top boundary of a descending channel and 50% Fibonacci level of the recent fall from the $24.00 mark.

A subsequent strength beyond the 61.8% Fibo. level might have already set the stage for additional gains. Moreover, the intraday range-bound price action seemed to constitute the formation of a rectangle on the 1-hour chart, which might now be categorized as a bullish continuation pattern.

The constructive setup is reinforced by the fact that technical indicators on the 4-hour chart have just started gaining positive traction. Adding to this, RSI (14) on the 1-hour chart has eased from slightly overbought conditions, adding credence to the intraday positive outlook.

This, in turn, supports prospects for a further near-term appreciating move. That said, oscillators on the daily chart – though have been recovering from the negative territory – are yet to confirm a positive bias. This warrants some caution before placing aggressive bullish bets.

From current levels, immediate resistance is pegged near the $23.80 level, which is followed by the $24.00 round figure. A sustained strength beyond will be seen as a fresh trigger for bullish traders and pave the way for some meaningful recovery from the recent lows, around the $22.20 region.

On the flip side, the $23.45-40 confluence resistance breakpoint now seems to protect the immediate downside. Any subsequent decline might continue to find decent support near the $23.00 mark ahead of the trend-channel support, currently near the $22.80 region.

Sustained weakness below has the potential to drag the XAG/USD further below intermediate support near mid-$22.00, towards challenging YTD lows touched earlier this month.

Silver 1-hour chart

Technical levels to watch