• Silver faces rejection near the 100-day SMA and comes under some selling pressure on Tuesday.
• The setup still favours bearish traders and supports prospects for a further depreciating move.
• A sustained strength beyond the $22.55-$22.60 region is needed to negate the bearish outlook.

Silver edges lower on Tuesday and snaps a two-day winning streak, albeit manages to hold above the $21.50 level heading into the North American session.

From a technical perspective, the recent bounce from the YTD low, around the $21.20-$21.15 region set last Friday faltered ahead of the $22.00 mark on Monday. The said handle coincides with the 100-day Simple Moving Average (SMA) support breakpoint and should now act as a pivotal point for the XAG/USD.

Some follow-through buying beyond the $22.15 zone, representing the 38.2% Fibonacci retracement level of the recent rally from October 2022, might prompt some technical buying. The momentum could lift the XAG/USD further, though is more likely to meet with a fresh supply near the $22.55-$22.60 hurdle.

That said, a sustained strength beyond the latter will shift the bias back in favour of bullish traders and pave the way for additional gains. The XAG/USD might then accelerate the positive move to 23.6% Fibo. level, around the $23.00 mark, before climbing to the $23.35-$23.40 strong horizontal resistance.

On the flip side, the 50% Fibo. level, around the $21.35 area, seems to protect the immediate downside ahead of Friday's swing low, around the $21.20-$21.15 zone. Failure to defend the said support levels could make the XAG/USD vulnerable to weaken below the $21.00 mark, towards the $20.60 region.

Given that technical indicators on the daily chart are holding deep in the negative territory, the downward trajectory could get extended further towards challenging the $20.00 psychological mark. The XAG/USD could eventually drop to test the next relevant support near the $19.75-$19.70 horizontal zone.

Silver daily chart

Key levels to watch