• Silver gained strong traction for the second straight day and recovered further from the monthly low.
• Move beyond the 200-period SMA on the 4-hour chart should allow bulls to conquer the $22.00 mark.
• Sustained weakness below the $21.00 round figure would shift the bias in favour of bearish traders.

Silver built on Friday's solid recovery move from the $20.60 area, or the lowest level since May 13 and gained follow-through traction on the first day of a new week. This marked the second successive day of a positive move and pushed spot prices back closer to mid-$21.00 during the early European session.

From a technical perspective, any subsequent move up is more likely to confront stiff resistance near the 200-period SMA on the 4-hour chart, currently around the $21.65-$21.70 region. Some follow-through buying should allow the XAG/USD to build on the momentum and aim back to conquer the $22.00 mark.

Sustained strength beyond the latter would negate any near-term negative outlook and be seen as a fresh trigger for bullish traders. The XAG/USD might then accelerate the move towards an intermediate resistance near the $22.30 area en-route the $22.50-$22.60 hurdle and the $23.00 round-figure mark.

On the flip side, the daily low, around the $21.10 region, now seems to protect the immediate downside. A convincing break below, leading to a subsequent break through the $21.00-$20.90 support, would suggest that attempted recovery has run out of steam and shift the bias back in favour of bearish traders.

The next relevant support is pegged near the monthly low, around the $20.60 area touched on Friday, ahead of the YTD low, around the $20.45 region. The downward trajectory could get extended and drag the XAG/USD towards challenging the $20.00 psychological mark for the first time since July 2020.

Silver 4-hour chart

Key levels to watch