Silver Price Analysis: XAG/USD finds support near $26.60 after a sharp correction ahead of US NFP

Silver price finds cushion near $26.60 amid correction ahead of US NFP report.
The US NFP report will influence market expectations for Fed rate cuts in June.
Deepening Middle East tensions keep near-term demand for Silver intact.

Sagar Dua FXStreet

Silver price (XAG/USD) discovers support near $26.60 after a pullback from more than two-years high of $27.34. The white metal takes a breather after a strong rally as investors turn cautious ahead of the United States Nonfarm Payrolls (NFP) report for March, which will be published at 12:30 GMT.

According to the expectations, fresh payrolls were 200K, lower than the former reading of 275K. The Unemployment Rate is expected to come out steady at 3.9%.

Investors will also focus on the Average Hourly Earnings data, which will provide fresh inflation outlook. The monthly wage growth is forecasted to have grown at a higher pace of 0.3% from 0.1% in February. In the same period, the annually wage growth is estimated to have dipped to 4.1% against 4.3%.

Strong labor demand and higher wage growth would allow the Federal Reserve (Fed) to delay rate cut plans while signs of labor market conditions easing will boost rate cut hopes for the June meeting. The US Dollar Index (DXY) stabilizes after recovering from two-week low of 103.90 ahead of the US NFP report.

The demand for Silver is bullish in the longer horizon due to deepening Middle East tensions. Air strikes from Israel forces on Iranian embassy in Damascus, situated near Syria’s capital, has deepened fears of Iran’s participation to Israel-Palestine war.

Silver technical analysis

Silver price saw a stalwart rally after a breakout of the Ascending Triangle pattern formed on daily timeframe. The aforementioned chart pattern exhibits sharp volatility contraction but a decisive breakout leads to heavy volume and wider ticks on the upside. The horizontal resistance of the above-mentioned chart pattern, placed from May 5 high at $26.13, has turned into a crucial support for the Silver price bulls.

Advancing 20-day Exponential Moving Average (EMA) near $25.25 keeps the near-term demand unabated.

The 14-period Relative Strength Index (RSI) oscillates in the bullish range of 60.00-80.00, indicating a strong momentum leaned to the upside.

Silver daily chart

XAG/USD

Overview
Today last price	26.76
Today Daily Change	-0.16
Today Daily Change %	-0.59
Today daily open	26.92

Trends
Daily SMA20	25.07
Daily SMA50	23.75
Daily SMA100	23.7
Daily SMA200	23.45

Levels
Previous Daily High	27.3
Previous Daily Low	26.68
Previous Weekly High	25
Previous Weekly Low	24.33
Previous Monthly High	25.77
Previous Monthly Low	22.51
Daily Fibonacci 38.2%	26.92
Daily Fibonacci 61.8%	27.06
Daily Pivot Point S1	26.63
Daily Pivot Point S2	26.35
Daily Pivot Point S3	26.01
Daily Pivot Point R1	27.25
Daily Pivot Point R2	27.59
Daily Pivot Point R3	27.87

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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