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.

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

 

 

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