Silver Price Analysis: XAG/USD breaks to near $23 due to strong US Dollar, Services PMI eyed

Silver price (XAG/USD) continues its five-day losing spell after slipping below Tuesday’s low of $23.48 in the early New York session. The white metal faces immense selling interest as the US Dollar remains resilient due to deepening global recession fears.

Investors continue to pump money into the US Dollar as developing economies are expected to report recession due to restrictive monetary policy by the Western central bankers. The appeal for the US Dollar has improved as fears of a recession in the United States economy are mild. Disappointed Chinese economic growth is the major driver of strength in the US Dollar.

S&P500 opens on a negative note as the market sentiment remains downbeat due to global uncertainties. The US Dollar Index (DXY) gathers strength for a fresh upside and is expected to extend gains above the immediate resistance of 105.00. Investors should prepare for an action in the US Dollar after the release of the US ISM Services PMI for August, which will be published at 14:00 GMT.

Meanwhile, Boston Fed President Susan Collins commented about the interest rate outlook and that further action will be based on incoming data. Fed Collins expects a slowdown in coming months and the central bank is far from containing inflation.

Silver technical analysis

Silver price corrects vertically to near the 200-day Exponential Moving Average (EMA), which trades around $23.30. The white metal forms a Head and Shoulder chart pattern, which is a bearish reversal pattern. The neckline of the aforementioned formation is placed from June 22 low at $22.18.

The Relative Strength Index (RSI) (14) drops to near 40.00. A bearish impulse would be activated if it breaks below the same.

Silver daily chart