Silver struggles to capitalize on its one-week-old uptrend beyond the 100-day simple moving average and faces a new supply on Thursday. Throughout the early European session, the precious metal is on the defensive and is currently trading near the daily low, slightly below the mid-$19.00s.
This region corresponds to the 38.2% Fibonacci retracement level of the recent strong decline from the monthly high and should serve as a pivot point for intraday traders. Sustained weakening below may encourage some technical selling, putting the XAG/USD at risk of falling lower below the $19.00 level and approaching the weekly low in the $18.80 range.
This coincides with the 23.6% Fibonacci retracement level, which, if forcefully breached, will nullify any near-term bullish bias and change the bias in favor of bearish traders. The XAG/USD may then accelerate the declining trend into the $18.30-$18.25 intermediate support before falling to the next significant level near the $18.00 round number.
On the other hand, the 100-day SMA, which is currently between $19.55 and $19.60, corresponds with the 50% Fibo. level. Some subsequent purchasing beyond the aforementioned confluence hurdle should enable the XAG/USD to reclaim the $20.00 psychological level. On the way to $21.00, the ascent might be extended to a barrier in the vicinity of $20.50.
A convincing breach of the aforementioned resistance levels will be viewed as a fresh trigger for bullish traders and signal that the XAG/USD has established a solid base ahead of the $18.00 mark. The succeeding rise should take spot prices above the monthly top, currently located in the $21.25-$21.60 band, to the crucial 200-day simple moving average, currently located in the $21.60-$21.60 level.