Silver Price Analysis: XAG/USD’s advance halts and finds support at the 20-day SMA


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  • XAG/USD retreated more than 1% towards the $24.20 area, still holding the 20-day SMA.
  • USD is strong after the release of June’s JOLTS Job Opening and the ISM Manufacturing PMI.
  • Rising US Treasury yields are not allowing metals to find demand.

On Tuesday, the XAG/USD Silver spot price significantly dropped, mainly due to the USD strength. Attention is on labour market data released as investors are modelling their expectations towards the next Federal Reserve (Fed) meeting. Meanwhile, the Greenback trades strong agains most of its rivals, with the USD DXY index rising towards the 102.30 area.

The US ISM July PMI came in slightly below expectations at 46.4 but higher than the previous reading of 46. JOLT's Job Openings missed expectations at 9.58M below the 9.62M. Its worth pointing out that Fed Chairman Powell stated that the economy holds resilient, but future decisions depend on incoming data, causing potential volatility in USD price dynamics on data releases. In that sense ADP job employment change, Jobless Claims, and Nonfarm Payrolls will be closely monitored this week for investors to start placing their bets on the next Fed meetings.

In the meantime, US yields are rising, which could be seen as the opportunity cost of holding non-yielding metals, are rising across the board. The 2-year yield remains steady at 4.88% while the 5 and 10 rates are at 4.22% and 4.02%, respectively, increasing more than 1%. In addition, the CME FedWatch tool indicates that investors are not so confident about a hike in September as their odds stand near 20% while the probabilities in November top out near 40%.

XAG/USD Levels to watch

As per the daily chart, the technical outlook for XAG/USD is shifting towards neutral to bearish, with signs of bullish exhaustion becoming evident. The Relative Strength Index (RSI) displays a negative slope above its midline, while the Moving Average Convergence Divergence (MACD) exhibits fading green bars. Furthermore, the pair is above the 20,100,200-day SMAs, suggesting that the bulls are firmly in control of the bigger picture.

Resistance levels: $24.90,$25.00, $25.30. 
Support levels: $24.15 (20-day SMA), $24.00, $23.80 

 

XAG/USD Daily chart

XAG/USD

Overview
Today last price 24.17
Today Daily Change -0.59
Today Daily Change % -2.38
Today daily open 24.76
 
Trends
Daily SMA20 24.19
Daily SMA50 23.67
Daily SMA100 23.97
Daily SMA200 23.08
 
Levels
Previous Daily High 24.84
Previous Daily Low 24.2
Previous Weekly High 25.15
Previous Weekly Low 24.04
Previous Monthly High 25.27
Previous Monthly Low 22.52
Daily Fibonacci 38.2% 24.59
Daily Fibonacci 61.8% 24.44
Daily Pivot Point S1 24.35
Daily Pivot Point S2 23.96
Daily Pivot Point S3 23.71
Daily Pivot Point R1 25
Daily Pivot Point R2 25.24
Daily Pivot Point R3 25.64

 

 

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