Silver bulls steering the ship in the face of US dollar storms

  • XAG/USD bulls are keen on the upside to target a 50% mean reversion. 
  • US dollar is perking up as a potential risk to the bullish playbook. 

Silver prices are bid again on Thursday extending their recovery in a series of higher daily highs for the week. 

At the time of writing, XAG/USD is trading 0.3% higher after rising from a low of $26.16 to a high of $26.39 so far and counting. 

The US dollar is also higher on the day compared to the prior day's closing price as measured by the DXY index. 

At the time of writing, the index, DXY, which measures the greenback against a basket of six currencies, was 0.3% higher at 92.641. The index fell as low as 92.272 earlier in the session but has printed a high of 92.694 so far. 

DXY has been recovering some of the ground lost in the prior session, from which silver benefitted, after the chairman of the Federal Reserve, Jerome Powell, testified to Congress.

Powell explained that there was no rush to move towards a tighter post-pandemic monetary policy. 

Fed chair Jerome Powell said he is confident recent price hikes are associated with the country's post-pandemic reopening and will fade.

Powell said that the Fed should stay focused on getting as many people back to work as possible.

Meanwhile, the US dollar found some support Thursday as the number of Americans filing new claims for unemployment benefits dropped last week and fell to a 16-month low.

There are signs that the labour market is steadily gaining traction.

Additionally, spiking coronavirus cases kept the dollar supported as Asia battles with the variant and subsequent lockdowns. 

XAG/USD technical analysis

Technically, there are prospects of a retest of the daily highs in 26.77 and a deeper 50% mean reversion correction of the June sell-off near 26.91.

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