• Silver price may approach the 14-year high at $41.67, reached on Monday.
• The 14-day Relative Strength Index suggests Silver is overbought, but the trend stays strong.
• The nine-day EMA of $40.62 may act as the initial support.

Silver price (XAG/USD) remains steady after two days of gains, trading around $41.40 per troy ounce during the early European hours on Tuesday. The technical analysis of the daily chart suggests the price of the precious metal moves upwards within an ascending channel pattern, indicating the market bias is bullish.

The 14-day Relative Strength Index (RSI) is positioned slightly above the 70 level, suggesting that the Silver price is trading in overbought territory and a possible downward correction any time soon. However, the prevailing uptrend remains strong with buyers maintaining control. Additionally, the XAG/USD pair is trading above the nine-day Exponential Moving Average (EMA), indicating that short-term price momentum is stronger.

On the upside, the XAG/USD pair is testing a crucial barrier at $41.50, followed by the $41.67, the highest since September 2011, reached on September 8, followed by the upper boundary of the ascending channel around the psychological level of $42.50. A decisive break above the channel would strengthen the bullish bias and pave the way for the metal to approach the crucial level of $43.00.

The XAG/USD pair may find its initial support at the nine-day EMA of $40.62, followed by the ascending channel’s lower boundary around $40.10, followed by the psychological level of $40.00 and the monthly low of $39.54, which was recorded on September 1. Further declines below this crucial support zone would dampen the bullish bias and put downward pressure on the Silver price to reach the 50-day EMA of $38.40.

XAG/USD: Daily Chart