- XAG/USD fell below $24.00, seeing losses of 2.40%.
- US private employment beat estimates in July.
- Higher US yields and a stronger dollar are driving commodities prices lower.
On Wednesday’s session, the XAG/USD Silver spot price fell to its lowest point since July 12 driven by a stronger USD to the $23.70 area. The DXY index is rising for a fifth consecutive day, mainly because the US economy is resilient and may push the Federal Reserve (Fed) not to halt its tightening cycle.
According to Automatic Data Processing Inc. (ADP), there were 324,000 employed people in the US in July, higher than the 189,000 expectations but lower than the revised number of 455,000 in June. As the labour market is still extremely tight, it may push the Fed to consider hiking in September, strengthening the USD.
In response, US bond yields and the opportunity cost of holding Silver are rising. The yields on the 5- and 10-year bonds increased by 4.26% and 4.10%, respectively, each by more than 1%. The 2-year yield increased by 0.60% on the day to 4.92%.
As for now, according to the CME FedWatch tool, markets anticipate that the Fed won't hike in September and bet on a low odd of 20% of a 25 basis point hike, while the chances of a hike in November top out at 30% in November.
XAG/USD Levels to watch
The daily chart analysis indicates a bearish outlook for the XAG/USD in the short term. The Relative Strength Index (RSI) is below its midline in negative territory, with a negative slope, aligning with the negative signal from the Moving Average Convergence Divergence (MACD), which displays red bars, reinforcing the strong bearish sentiment. On the other hand, the pair is below the 20 and 100-day Simple Moving Averages (SMAs), but above the 200-day SMA, indicating that the bulls aren't done yet and that the outlook is still positive, looking at the bigger picture.
Support levels: $23.40,$23.15 (200-day SMA), $23.00.
Resistance levels. $24.00 (100-day SMA), $24.27 (20-day SMA), $24.50.
XAG/USD Daily chart
-638266036123266746.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD turns negative near 1.0760
The sudden bout of strength in the Greenback sponsored the resurgence of the selling pressure in the risk complex, dragging EUR/USD to the area of daily lows near 1.0760.
GBP/USD comes under pressure and challenges 1.2500
GBP/USD now rapidly loses momentum and gives away initial gains, returning to the 1.2500 region on the back of the strong comeback of the US Dollar.
Gold retreats from highs on stronger Dollar, yields
XAU/USD trims part of its initial advance in response to the jump in the Dollar's buying interest and the re-emergence of the upside pressure in US yields.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.