Silver Price Analysis: XAG/USD eyes to regain $27.00 after the recent pump-and-dump

Silver consolidates Tuesday’s loses, the biggest in six month, while bouncing off weekly bottom.
Risk gains in Asia amid chatters over US stimulus talks, receding retail rush.
DXY jumped to two-month high before easing off-late.
China Caixin Services PMI, US aid package talks can entertain traders ahead of the key US data.

Anil Panchal FXStreet

Silver picks up bids near $26.92, up 1.86% intraday, during the initial hour of Tokyo open on Wednesday. The white metal dropped the most since August the previous day while reversing Monday’s rally on market frenzy. Also favoring the commodity sellers was the US dollar’s gains and a light calendar.

Although US Treasury Secretary Janet Yellen quotes Congressional Budget Office (CBO) forecasts while stating the desperate need for the fiscal stimulus, policymakers in the Senate keep haggling over the much-awaited relief, which in turn probes the greenback bulls. That said, the US dollar index (DXY) rose to the highest since early December on Tuesday after US President Joe Biden said talks with Republicans, over the aid package, were “substantive and productive”. Also backing the greenback buyers were Democratic push for the budget resolution that will enable them to pass the relief package without opposition’s support.

Read: Market focussed back on the size of the Biden fiscal bonanza

Other than the domestic play, the USD also gained after European GDP marked another dismal data from the bloc and drove traders towards a comparatively better option, for now.

It should be noted that a reduction in the retail rush added strength to the US dollar. However, comments from Reuters, suggesting the US mint’s inability to meet the surging demand for gold and silver coins in 2020 and through January favor the commodity buyers. “Sales of U.S. gold bullion coins rose 258% in 2020 while silver coin demand was up 28%, the U.S. Mint said Tuesday. Heavy buying has continued in 2021, it said, squeezing supplies, which had already been tight as the coronavirus affected production,” said the news.

Amid these plays, S&P 500 Futures rise 0.35% whereas stocks in Japan and Australia stay bid but those from New Zealand await fresh clues despite upbeat employment data.

Although the Asian economic calendar doesn’t offer any major data/events, except for China Caixin Services PMI, expected to ease to 51.1 from 56.3, the US session will entertain markets will the ADP Employment Change and ISM Services PMI for January.

Read: ADP Employment Change January Preview: A return to hiring?

Technical analysis

10-day SMA offers immediate support around $26.30, which in turn directs silver run-up towards January’s high of $27.92.

Additional important levels

Overview
Today last price	26.98
Today Daily Change	0.55
Today Daily Change %	2.08%
Today daily open	26.43

Trends
Daily SMA20	25.89
Daily SMA50	25.36
Daily SMA100	24.83
Daily SMA200	22.92

Levels
Previous Daily High	29.13
Previous Daily Low	26.28
Previous Weekly High	27.66
Previous Weekly Low	24.7
Previous Monthly High	27.92
Previous Monthly Low	24.19
Daily Fibonacci 38.2%	27.37
Daily Fibonacci 61.8%	28.04
Daily Pivot Point S1	25.43
Daily Pivot Point S2	24.43
Daily Pivot Point S3	22.58
Daily Pivot Point R1	28.28
Daily Pivot Point R2	30.13
Daily Pivot Point R3	31.13

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.