Silver Seems Poised To Test $25.55-60 Area

(November 15th, 2021 - Haresh Menghani)

• Silver attracted some dip-buying on Monday and recovered a part of its intraday losses.
• The technical set-up favors bullish traders and supports prospects for additional gains.

Silver edged lower on the first day of the week, though the downtick showed some resilience below the 50% Fibonacci level of the $28.75-$21.42 downfall. The white metal has now recovered a major part of its intraday losses and was last seen trading around the $25.20 region, just below the highest level since August 5 touched on Friday.

The emergence of some dip-buying at lower levels comes on the back of last week's sustained breakout through 100-day SMA/38.2% Fibo. confluence barrier and the $24.50 supply zone. A subsequent move beyond the 50% Fibo. level, around the key $25.00 psychological mark, favours bullish traders and supports prospects for further gains.

The positive outlook is reinforced by bullish oscillators on the daily chart, which area still far from being in the overbought zone. Hence, some follow-through move towards the $25.55-60 region, en-route the $26.00 mark, remains a distinct possibility. The latter coincides with the 61.8% Fibo. level and should act as a strong barrier for silver.

On the flip side, any meaningful corrective pullback might continue to attract some dip-buying and remain limited near the $24.50 resistance breakpoint. Failure to defend the mentioned support could prompt some technical selling and turn the XAG/USD vulnerable to accelerate the corrective pullback towards the $24.00 round-figure mark.