Silver: XAG/USD could climb further, descending trend-line breakout in play

LONDON (September 16) Silver (XAG/USD) builds on its recent strong upward trajectory witnessed over the past week or so and climbs to a nearly two-month top on Monday. The white metal sticks to its intraday gains through the first half of the European session and currently trades just below the $31.00 mark, up 0.70% for the day. 

Looking at the broader picture, Friday's breakout through a short-term descending trend-line was seen as a fresh trigger for bullish traders. The subsequent move up, along with the fact that oscillators on the daily chart have just started gaining positive traction, suggests that the path of least resistance for the XAG/USD is to the upside and supports prospects for additional gains.

Hence, some follow-through strength towards testing the next relevant hurdle, around the $31.45-$31.50 supply zone, looks like a distinct possibility. The momentum could extend further towards reclaiming the $32.00 mark, above which the XAG/USD could climb back towards challenging a one-decade high, around mid-$32.00s touched in May. 

On the flip side, the $30.50-$30.45 horizontal zone now seems to protect the immediate downside. Any further decline could be seen as a buying opportunity and remain cushioned near the aforementioned descending trend-line resistance breakpoint, now turned support, currently near the $30.00 psychological mark. The latter could act as a key pivotal point for short-term traders. 

A convincing break below might prompt aggressive technical selling and make the XAG/USD vulnerable to accelerate the fall towards the $29.40-$29.35 region en route to the $29.00 round figure. Some follow-through selling might shift the bias in favor of bears and expose the $27.70 area, or the monthly low, with some intermediate support near the $28.20-$28.15 zone.

FXStreet