- XAG/USD lost more than 4% this week and fell to monthly lows near $22.65.
- The USD benefited due to a sour market mood.
- Markets try to decipher the next Fed movements while speakers deliver mixed signals.
On Tuesday, the XAG/USD continued its downward path and fell to its lowest since July 7th. The USD measured by the DXY trades strong above 102.50, but lower yields may cap gains. All eyes are now on inflation data on Thursday.
Federal Reserve (Fed) doves and hawks are battling it out publicly, leaving investors scratching their heads. Michelle Bowman pointed out that more increases will likely be appropriate. At the same time, John Williams showed himself comfortable with the Fed’s monetary policy, stating that the bank has the policy where it wants it to be. On Tuesday’s session, Thomas Barkin gave no highlights and said, “ I don't want to predeclare where rates will go.
According to the CME FedWatch tool, tightening expectations for the Federal Reserve remains low. The odds of a hike stand near 14% for the September meeting and rise near 30% in November. However, those odds will likely be impacted by inflation figures on Thursday, also dictating the pace for the bond market and the USD. It's worth noting that non-yielding metals tend to be negatively correlated with higher interest rates, so investors will closely monitor Thursday’s inflation data.
In that sense, the Headline Consumer Price Index (CPI) index is expected to accelerate to 3.3% YoY and the Core CPI, which is seen falling to 4.7% in the same month.
XAG/USD levels to watch
With both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) comfortably placed in negative territory on the daily chart, the XAG/USD sellers hold the upper hand. The downward slope of the Relative Strength Index (RSI) near 30.00 further reinforces this negative sentiment, as does the MACD, which displays red bars, indicating a strengthening bearish momentum. Additionally, the metal is below the 20,100 and 200-day Simple Moving Averages (SMAs), suggesting that the bears are firmly in control of the bigger picture, leaving the buyers with tasks to accomplish.
Support levels: $22.50, $22.30, $22.00.
Resistance levels: $23.20 (200-day SMA), $23.50, $23.70, $24.00.
XAG/USD Daily chart
|Today last price||22.71|
|Today Daily Change||-0.42|
|Today Daily Change %||-1.82|
|Today daily open||23.13|
|Previous Daily High||23.68|
|Previous Daily Low||23.07|
|Previous Weekly High||24.84|
|Previous Weekly Low||23.23|
|Previous Monthly High||25.27|
|Previous Monthly Low||22.52|
|Daily Fibonacci 38.2%||23.31|
|Daily Fibonacci 61.8%||23.45|
|Daily Pivot Point S1||22.91|
|Daily Pivot Point S2||22.68|
|Daily Pivot Point S3||22.29|
|Daily Pivot Point R1||23.52|
|Daily Pivot Point R2||23.91|
|Daily Pivot Point R3||24.13|
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.