Silver Price Analysis: XAG/USD recovers quickly to near $23 on persistent Fed rate cut bets


  • Silver price rebounded to near $23.00 as investors digest higher US inflation data.
  • Investors remain confident that the Fed will cut interest rates in March.
  • Silver price could slip to $21.88 if the RSI (14) settles below 40.00.

Silver price (XAG/USD) discovered a significant buying interest after printing a fresh seven-week low at $22.50. The white metal has recovered to near $23.00 as bets in favour of a rate-cut decision by the Federal Reserve (Fed) in March remains firmer despite stubbornly higher United States Consumer Price Index (CPI) report for December.

S&P500 futures have generated some losses in the Asian session, portraying a decline in the risk-appetite of the market participants. The US Dollar Index (DXY) has surrendered entire gains generated after the release of the higher-than-projected inflation figures.

The headline inflation expanded at an annual pace of 3.4% against the consensus of 3.2% and the prior reading of 3.1%. While the core CPI that strips of volatile food and oil prices decelerated slightly to 3.9% versus. the prior reading of 4.0%.

Investors remain confident that the Fed will start the ‘rate-cut’ campaign from March despite a sticky inflation report. As per the CME Fedwatch tool, chances in favour of a rate cut by 25 basis points (bps) to 5.00-5.25% remained steady at around 68%.

Silver technical analysis

Silver price discovers some buying interest near the horizontal support plotted from December 13 low at $22.51. The 50-period Exponential Moving Average (EMA) at $23.17 continues to act as a barricade for the Silver price bulls. The Silver price would expose to November 13 low at $21.88 if the asset faces sell-off again.

A bearish momentum would activate if the 14-period Relative Strength Index (RSI) slips into the lower range of 20.00-40.00.

Silver four-hour chart

XAG/USD

Overview
Today last price 22.89
Today Daily Change 0.15
Today Daily Change % 0.66
Today daily open 22.74
 
Trends
Daily SMA20 23.66
Daily SMA50 23.66
Daily SMA100 23.28
Daily SMA200 23.63
 
Levels
Previous Daily High 23.16
Previous Daily Low 22.48
Previous Weekly High 24.09
Previous Weekly Low 22.69
Previous Monthly High 25.92
Previous Monthly Low 22.51
Daily Fibonacci 38.2% 22.74
Daily Fibonacci 61.8% 22.9
Daily Pivot Point S1 22.43
Daily Pivot Point S2 22.11
Daily Pivot Point S3 21.75
Daily Pivot Point R1 23.11
Daily Pivot Point R2 23.47
Daily Pivot Point R3 23.79

 

 

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