Silver Price Forecast: XAG/USD fluctuates around $22.40s as investors wait for the US CPI data

Silver (XAG/USD) is barely down during the New York session, trading at $22.46 at the time of writing. The market sentiment is mixed, with European equities fishing the day with losses, whereas US equities are rising, except for the Dow Jones Industrial, losing 0.13%. Upbeat news regarding vaccine effectiveness against the omicron variant improved market sentiment. Early lab studies made by two of the most successful COVID-19 vaccines showed that a third shot neutralizes the omicron variant.

In the overnight session, XAG/USD price action remained subdued, within the $22.29-55 range, but lack of a catalyst might keep the non-yielding metal fluctuating around the hourly 50 and 100-simple moving averages.

In the meantime, the 10-year US Treasury yield advances two and a half basis points, sitting at 1.50%, failing to drag the greenback, with the US Dollar Index back below the 96 handle, down 0.50%, at 95.89.

In the last week, Federal Reserve policymakers led by US central bank Chair Jerome Powell expressed the need for a faster Quantitative Easing reduction so that the Fed could have enough room to maneuver. Further, Chair Powell said that inflation is no longer “transitory,” which investors perceived as hawkish rhetoric. 

That said, XAG/USD traders have their eyes on Friday, when the Consumer Price Index (CPI) for November will cross the wires. The CPI is, expected at 6.8% on an annual basis, while the monthly headline is estimated at 0.7%.

XAG/USD Price Forecast: Technical outlook

Silver (XAG/USD) in the 1-hour chart depicts a range-bound trading environment, even though the 1-hour 50 and 100-simple moving averages (SMA’s) reside below the spot price. Additionally, the $22.45 price level is a strong resistance that the non-yielding metal cannot overcome, which could open the way for further losses.

Failure a the abovementioned level would open the way for further losses. The first support would be the confluence of the 50 and the 100-hour SMA’s, around $22.39-40. A break of that area would exert downward pressure on the white metal, exposing the S1 daily pivot point at $22.25, followed by the December 7 low at $22.21, and then the S2 daily pivot point at $22.05.

On the flip side, In the outcome of breaking to the upside, the first resistance would be the December 7 cycle high at $22.58. The breach of the latter could send silver advancing sharply towards $22.80, immediately followed by $23.00.