Silver Price Analysis: XAG/USD clears losses gains after Powell's words

XAG/USD found support at a low of around $22.55 and recovered to $22.90 clearing more than 1% of losses.
The Fed decided to hold rates at the 5.25-5.50% range.
Powell signalled that the end of the rate hike cycle is near.
Falling US Treasury yields allowed the metal to find demand.

Patricio Martín FXStreet

In Wednesday's session, the XAG/USD faced selling pressure, but Chair Powell's dovish words made the grey metal reverse its course towards $22.90, and at the time of writing, it is up by 0.20% on the day.

After the Federal Reserve (Fed) announced it would hold rates at the 5.25-5.50% range, Chair Powell sounded somewhat hawkish at the beginning of his presser that he would take into account the tighter financial conditions and the cumulative effects of the monetary policy for the next December decision. In addition, he welcomed the decelerating inflation and job creation figures, but he pointed out he still needs more data points to feel confident that the bank's job is done. That being said, he then commented that the Fed had come very far with this rate-hike cycle and that is close to its end, which triggered a wave of risk-on flows benefiting the Silver's price.

In addition, US Treasury yields are sharply falling, with the 2-year rate falling below 5%, down by more than 2%, while the 5 and 10-year rates declined to 4.67% and 4.75%.

Focus now shifts to Friday's Nonfarm Payrolls report and next week's inflation readings from October for investors to continue placing their bets on the next decisions.

XAG/USD Levels to watch

Analyzing the daily chart, it is apparent that the XAG/USD has a neutral to bearish technical stance, with the metal trading below the 200 and 100-day Simple Moving Averages (SMA). In addition, the Relative Strength Index (RSI) and the Moving Average Convergence (MACD) turned flat after the momentum gained during the American session and despite bullish momentum being limited, the metal holds above the 20-day average which could act as a support for the next sessions.

Support levels: $22.55,$22.30,$22.15.

Resistance levels: $23.00,$23.20-30 (200 and 100-day convergence),$23.50

XAG/USD Daily Chart

XAG/USD

Overview
Today last price	22.58
Today Daily Change	-0.30
Today Daily Change %	-1.31
Today daily open	22.88

Trends
Daily SMA20	22.47
Daily SMA50	22.96
Daily SMA100	23.23
Daily SMA200	23.29

Levels
Previous Daily High	23.33
Previous Daily Low	22.74
Previous Weekly High	23.36
Previous Weekly Low	22.44
Previous Monthly High	23.7
Previous Monthly Low	20.68
Daily Fibonacci 38.2%	22.96
Daily Fibonacci 61.8%	23.1
Daily Pivot Point S1	22.63
Daily Pivot Point S2	22.39
Daily Pivot Point S3	22.04
Daily Pivot Point R1	23.23
Daily Pivot Point R2	23.58
Daily Pivot Point R3	23.83

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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