Silver Prices: XAG/USD bulls seize control above $29.20 confluence breakpoint

LONDON (August 20) Silver (XAG/USD) reverses an intraday dip and climbs to a fresh one-month peak during the early part of the European session on Tuesday. The white metal currently trades around the $29.60-$29.65 area, up over 0.70% for the day, and seems poised to prolong its recent goodish recovery from the $26.45 zone, or the lowest level since May touched earlier this month. 

From a technical perspective, the overnight breakout through the $29.20 confluence hurdle – comprising the 50-day Simple Moving Average (SMA) and the 50% Fibonacci retracement level of the July-August slide – was seen as a fresh trigger for bulls. Moreover, oscillators on the daily chart have been gaining positive traction and are still away from being in the overbought zone, validating the near-term positive outlook for the XAG/USD.

Adding to this, the emergence of dip-buying near the aforementioned confluence resistance breakpoint, now turned support, also supports prospects for a further near-term appreciating move. Hence, a subsequent strength beyond the 61.8% Fibo. level, around the $29.75 region, en route to the $30.00 psychological mark, looks like a distinct possibility. The momentum could extend towards the $30.55-$30.60 area, or the 78.6% Fibo. level.

On the flip side, the $29.20 area now seems to protect the immediate downside ahead of the $29.00 round-figure mark. Some follow-through selling could make the XAG/USD vulnerable to accelerate the slide towards the $28.55 region, or the 38.2% Fibo. level, en route to the $28.00 round figure. The latter should act as a key pivotal point, which if broken might expose the $27.25 support before the metal drops back to test the $27.00 mark.

FXStreet