Silver Price Analysis: XAG/USD hits one-week high, eyes $19.50 confluence resistance

• Silver catches strong bids on Thursday and jumps to a fresh weekly high.
• Sustained strength beyond the 23.6% Fibo. level favours bullish traders.
• Mixed technical indicators on daily/hourly charts warrant some caution.

Silver gains strong positive traction on Thursday and climbs to a fresh weekly high, around the $19.40 region during the first half of the European session.

The momentum lifts the XAG/USD beyond the 23.6% Fibonacci retracement level of the $20.88-$18.75 slide and supports prospects for additional gains. The constructive outlook is reinforced by the fact that oscillators on hourly charts have been gaining positive traction.

That said, technical indicators on the daily chart are yet to confirm a bullish bias, suggesting that any subsequent move up might confront stiff resistance near the $19.50 confluence. The said barrier comprises 38.2% Fibo. level and the 200-period SMA on the 4-hour chart.

Some follow-through buying, however, will set the stage for an extension of the recent bounce from a multi-week low, around the $18.70 region touched on Monday. The XAG/USD might then test the 50% Fibo. level, around the $19.80 region, aim to reclaim the $20.00 psychological mark.

On the flip side, the $19.20 area (23.6% Fibo. level) now seems to protect the immediate downside ahead of the $19.00 round figure. A decisively break below could make the XAG/USD vulnerable to accelerate the fall back towards the weekly low, around the $18.70 region.

The next relevant support is pegged near the $18.45-$18.40 area, below which the downward trajectory could get extended and drag the XAG/USD to the YTD low, around the $18.15 zone touched in July.

Silver 4-hour chart

Key levels to watch