Silver bears taking up the baton towards a 50% mean reversion target

The white metal under pressure on Monday despite the drop in the greenback and weakness in US stocks.
DXY ended lower by nearly 0.6% in a slide from 91.7460 to a fresh six-week low of 91.0340.

Ross J Burland FXStreet

DXY breached a significant daily support structure, despite a firmer bid in US yields.

Despite the equity weakness, the US 10-year yield rose 2.8bps to 1.608%.

However, improved risk sentiment last week as shown by the rally in global stocks to record highs has continued to weigh on both the greenback

Precious metals were unable to collect investor’s interest and XAG/USD was closing down some 0.5%. The gold to silver ratio also rallied over 0.2%.

However, there was a good move in industrial metals, so silver could find itself playing catch up in the forthcoming sessions.

Both copper and iron ore rallied on the day and the commodity complex, in general, was better bid despite markets being on the defensive in the main.

Copper was hitting a seven-week high amid prospects of strong demand.

''Recent robust economic data in China and the US has boosted optimism that demand will continue to recover following the pandemic-induced slowdown last year. The market has also been buoyed by the infrastructure spending program US President Biden is looking to implement,'' analysts at ANZ Bank explained.

Also worth noting, the MSCI's emerging market currency index hit its highest level in a month. Top emerging markets tend to have positive correlations to commodities and the price of silver.

Silver technical analysis

Silver prices have stalled at daily resistance and in the day’s move to the downside, it has subsequently formed a new 4-hour resistance at 25.91.

Supply would be anticipated to reemerge there and result in a deeper bearish retracement towards the early April highs and a confluence with the 50% mean reversion level of the latest bullish daily impulse at 25.50.

Daily chart

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.