Silver Price Analysis: XAG/USD flirts with the daily high but upside potential appears restricted

On the opening day of the new week, silver gains ground and moves away from a two-week low of $18.00, which was reached on Friday. The white metal maintains its bid tone heading into the European session and is currently flirting with the daily high in the zone between $18.50 and $18.45.

The XAG/USD appears to have ended a six-day losing run and halted its recent steep rejection decline from the 200-day exponential moving average, or its highest level since late June. The area between $18.90 and $19.00 should serve as a pivot point for intraday traders for any future upward movement.

Continued strength beyond may spark a short-covering rally and boost the XAG/USD back to the supply zone between $19.70 and $19.80. In the meantime, oscillators on the daily chart have just begun to move into negative territory. In addition, bearish technical signs on the 4-hour chart call for caution before positioning for additional gains.

However, sustained buying above the $20.00 psychological level will neutralize any near-term bearish view and pave the door for a further near-term uptrend. The XAG/USD could next ascend to the $20.50 intermediate resistance level en way to the $21.00 round number and the 200-day EMA, which is now located in the $21.15 area.

In contrast, the $18.00 level appears to have arisen as immediate strong support, which, if decisively breached, will be viewed as a new trigger for bearish traders. The subsequent key support is located at the yearly low, in the vicinity of the $17.55 region recorded in September, below which the XAG/USD might test the $17.00 round number.