On Friday, new purchasing in silver occurs, and it gradually returns to its weekly top. The technical configuration favors the possibility of new selling at higher levels emerging. A sustained rise over $22.00 is required to reverse the short-term negative tendency.

Towards the middle of the European session on Friday, silver gathers momentum and moves back up to the top of its weekly trading range, around the $21.15–$21.20 area. Before preparing for any additional intraday appreciating rise, bulls are currently waiting for a sustained strength beyond the 200-hour SMA.

Any further advance upward, however, is expected to run into significant resistance just ahead of the mid-$21.00 level, which represents the 23.6% Fibonacci retracement of the most recent decline from the $24.65 region or the multi-month high reached in February. But continued strength could set off a short-covering move, pushing the XAG/USD towards the 38.2% Fibo level, or roughly $22.00 in round numbers.

Nonetheless, technical indicators on the daily chart have recovered from the oversold region and are still firmly holding in negative territory. The current recovery move from the YTD low, around the $20.40 zone reached earlier this week, faces the danger of fizzling out pretty soon around the handle above, which in turn enhances possibilities for the appearance of new selling at higher levels.

On the other hand, the $20.70–$20.60 range seems to guard against the near-term drop before the $20.40 level. Failing to protect the support above levels would be seen by bearish traders as a new trigger, opening the door for more losses. The silver price might become vulnerable, falling much lower than the psychological $20.00 level and testing the next significant support close to the $19.75–$19.70 area.

Before the XAG/USD ultimately descends below the $18.25-$18.20 horizontal solid support, the downward trajectory might be prolonged into the $19.20-$19.15 intermediate support on the way to the $19.00 round figure.

1-hour silver chart