SILVER PRICE ANALYSIS: THE XAG/USD Try the key support of 37.50 $ before the Fed decision

• La Plata extends its decline, it remains about $ 37.50 after reaching a maximum of $ 14.53 on July 23.
• The US dollar is recovered with solid macroeconomic data; The GDP of the second quarter grew 3.0%, exceeding expectations.
• The Fed is expected to keep the rates in the range of 4.25%-4.50%; The political pressure increases after Trump’s call to rates cuts.

La Plata (XAG/USD) descends on Wednesday, around $ 37.50 after two days of negotiation contained and in rank, pressured by the renewed fortress of the US dollar (USD). The dollar extended its recovery after a series of American economic data stronger than expected, exerting pressure on precious metals. At the same time, a broader risk tone in global markets is further decreasing the demand for safe refuge assets such as silver. The operators now focus their attention on the monetary policy decision of the Federal Reserve (FED) that will be announced later on Wednesday, which could inject new volatility into the market.

New US economic data published on Wednesday reinforce the narrative of a resilient economy. The preliminary reading of the GDP of the second quarter showed that the US economy expanded at an annualized pace of 3.0%, far exceeding the contraction of 0.5% recorded in the first quarter. Meanwhile, the preliminary underlying PCE price index increased 2.5% in the second quarter, staying above the 2% target of the central bank. However, the GDP price index was reduced to 2.0%, below the expected 2.4%, while the general PCE inflation was significantly slowed to 2.1% from 3.7%. In the work front, the ADP employment change report revealed a stronger gain than expected of 104,000 jobs in the private sector in July, a remarkable recovery with respect to the 33,000 revised June. The data suggests to a sustained impulse in growth and hiring, but the signals of inflation in deceleration can give the FED margin to maintain a cautious tone in their policy guide.

The Fed is expected to maintain interest rates without changes in the range of 4.25% -4.50% in today’s policy decision. However, the Central Bank continues to face a growing political pressure. The president of the United States, Donald Trump, spoke on the strongest GDP figures than expected on Wednesday, publishing in Truth Social: “The GDP of the 2t has just left: 3%, much better than expected! Although the Fed maintains its position of independence and dependence on the data, such comments may increase attention on the statements after the meeting of the Fed President Powell.

From a technical point of view, La Plata (XAG/USD) has been under pressure after reaching a maximum of 14 years of 39.53 $ July 23. The price has fallen almost 4.75%, sliding below the midpoint of the upward channel that has defined the upward trend since April.

At this time, La Plata is testing a key support level in 37.50 $ – an area that previously acted as resistance. A daily closure below this area could pave the way for a movement towards the lower limit of the ascending channel, which closely coincides with the 50 -day exponential (EMA) mobile average, increasing the risk of a deeper setback if buyers fail to defend this level. A clear rupture below that region would probably expose the 100 -day EMA at $ 35.10, followed by the 200 -day EMA about $ 33.31, raising the risk of a deeper corrective movement.

Impulse indicators are showing warning signals. The relative force index (RSI) has fallen to 50, suggesting a fading of the bullish impulse. At the same time, the convergence/divergence indicator of the mobile average (MACD) has become bassist, with the MACD line crossing below the signal line and the histogram moving to negative territory, indicating a growing downward pressure.

On the positive side, the initial resistance is located in the 38.25 $ -38.50 $ area. A rupture is needed above this area to restore the short -term bullish control. A movement through $ 39.53 would confirm a break and probably would pave the way for a psychological level test of $ 40.00. Until then, short -term bias leans down.