• Silver witnesses some selling for the second straight day and moves away from a multi-week high.
• The technical set-up still seems tilted in favour of bulls and supports prospects for additional gains.
• A sustained break below the $19.20 region is needed to negate the near-term constructive outlook.

Silver edges lower for the second successive day and retreats further from a six-week peak touched on Monday. The white metal remains depressed through the early European session on Wednesday and is currently placed near a two-day low, around the $20.40-$20.35 region.

The aforementioned area marks confluence support, comprising the 50-day SMA and the 50% Fibonacci retracement level of the $22.52-$18.15 downfall. A convincing break below could prompt some technical selling and drag the XAG/USD back towards the $20.00 psychological mark.

The latter should act as a pivotal point, which if broken decisively would make the XAG/USD vulnerable. Some follow-through selling below the $19.80-$19.75 region (38.2% Fibo. level) would reaffirm the negative bias and expose the 23.6% Fibo. level, around the $19.20 zone.

This is followed by the $19.00 round-figure mark, below which the XAG/USD could accelerate the downfall towards the next relevant support near the $18.40 area. Spot prices could eventually drop to challenge the YTD low, around the $18.15 region touched on July 14.

On the flip side, the $20.65-$20.70 zone now seems to act as an immediate resistance ahead of the 61.8% Fibo. level, around the $20.85 region, and the $21.00 mark. Sustained strength beyond would be seen as a fresh trigger for bullish traders and pave the way for additional gains.

The subsequent move up has the potential to lift the XAG/USD towards an intermediate resistance near the $21.40-$21.50 area en route to the 100-day SMA, currently around the $21.85 region, and the $22.00 round-figure mark.

Silver daily chart

Key levels to watch