Market Analysis

Bulls in XAG/USD take the lead above the $29.20 confluence breakpoint

Amos Simanungkalit · 20 Aug20.9K Views

Silver (XAG/USD) has reversed an intraday decline and surged to a fresh one-month high early in the European session on Tuesday. The white metal is currently trading around $29.60-$29.65, marking a gain of over 0.70% for the day. This uptrend continues the metal’s recovery from its recent low of $26.45, the lowest since May.

Technically, the overnight breakout above the $29.20 resistance—comprising the 50-day Simple Moving Average (SMA) and the 50% Fibonacci retracement level of the July-August decline—has been a bullish signal. Additionally, the oscillators on the daily chart are gaining positive momentum and are not yet in the overbought zone, supporting a favorable short-term outlook for XAG/USD.

The support near the $29.20 resistance level, now turned support, further reinforces the potential for additional gains. A move beyond the 61.8% Fibonacci retracement level, around $29.75, could lead to a test of the $30.00 psychological level. Should the momentum persist, prices might extend towards the $30.55-$30.60 area, or the 78.6% Fibonacci level.

Conversely, the $29.20 level is expected to offer immediate support, with the next major downside target at $29.00. If selling pressure increases, XAG/USD could drop towards the $28.55 region, or the 38.2% Fibonacci level, potentially moving further to the $28.00 round figure. A break below $28.00 could expose further support levels around $27.25, with a potential decline to $27.00.