Silver Price Forecast: XAG/USD appreciates beyond $38.00 but lacks bullish momentum

• Silver returns above $38.00 amid subdued market volatility.
• Investors' caution ahead of the Trump-Zelenskyy meeting is providing some support to precious metals.
• XAG/USD's bulls are likely to be challenged at $38.40.
  

Silver (XAG/USD) has trimmed some losses in a cautious market session, returning above $the $38.00 level on Monday. A moderate risk aversion as traders await the outcome of the Trump-Zelenskyy meeting is buoying precious metals. Silver, nevertheless, is lacking a clear bullish momentum.

The US Dollar, on the other hand, is showing a somewhat firmer tone on Monday. The US Dollar Index, which measures the value of the US Dollar against a basket of six currencies, appreciates about 0.2%, following a 0.85% decline in the previous two trading days. This USD strength is limiting Silver's upside attempts.

Technical analysis: XAG/USD likely to be capped below $38.40

The technical picture suggests that the current recovery is a correction after the reversal from the $38.75 high last week, which has pushed price action below the ascending trendline support. The 4-Hour RSI remains flat around the 50 level, reflecting a lack of a clear bias, while a bearish divergence hints at a deeper reversal.

Price action broke the trendline support from late July last week, which is expected to pose a serious challenge for bulls at the confluence with an intraday resistance and support level at $38.40. A successful break of that level would ease bearish pressure and bring the August 14 high, at the mentioned $38.75 area, back into play.

A bearish reversal from current levels, on the contrary, might find support at Friday's low, $37.70, ahead of the August 5 low, at $37.35. Further down, the next target is the August 4 low, at $36.65.