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Silver Price Analysis: XAG/USD cuts losses after Powell’s words

  • The XAG/USD pair found support at a low around $22.55 and recovered to $22.90, clearing more than 1% of losses.
  • The Fed decided to keep rates in the 5.25-5.50% range.
  • Powell noted that the end of the rate hike cycle is near.
  • Falling US Treasury yields allowed the metal to find demand.

At Wednesday’s session, the XAG/USD faced selling pressure, but dovish words from Chairman Powell caused the gray metal to reverse course towards $22.90 and, at the time of writing, is up 0.20% on the day.

After the Federal Reserve (Fed) announced that it would keep rates in the 5.25-5.50% range, Chairman Powell sounded a bit hawkish at the beginning of his speech to the press and said that he would take into account the tightening of conditions financial and the cumulative effects of monetary policy for the next decision in December. Additionally, he welcomed the slowing inflation and job creation numbers, but noted that he still needs more data to feel confident that the Fed’s job is done. That said, he then commented that the Fed had come too far with this rate hike cycle and is nearing its end, triggering a wave of risk-on flows that benefited the price of Silver.

Additionally, US Treasury yields are falling sharply, with the 2-year yield down more than 2% below 5%, while the 5- and 10-year rates fell to 4.67% and 4.75%. .

Attention now turns to Friday’s Nonfarm Payrolls report and next week’s October inflation readings for investors to continue placing their bets on upcoming decisions.

XAG/USD Levels to watch

Analyzing the daily chart, it is seen that the XAG/USD pair has a neutral to bearish technical stance, with the metal trading below the 200 and 100-day simple moving averages (SMA). Furthermore, the Relative Strength Index (RSI) and Moving Average Convergence (MACD) turned flat following the momentum gained during the American session and despite the bullish momentum being limited, the metal remains above the 20-day average, which could act as support for the next sessions.

Support levels: $22.55, $22.30, $22.15.

Resistance levels: $23.00, $23.20-$30 (200 and 100 day convergence), $23.50

XAG/USD Daily Chart


Latest price today 22.58
Today Daily variation -0.30
Today’s daily variation -1.31
Today’s daily opening 22.88
daily SMA20 22.47
daily SMA50 22.96
SMA100 daily 23.23
SMA200 daily 23.29
Previous daily high 23.33
Previous daily low 22.74
Previous weekly high 23.36
Previous weekly low 22.44
Previous Monthly High 23.7
Previous monthly low 20.68
Daily Fibonacci 38.2 22.96
Fibonacci 61.8% daily 23.1
Daily Pivot Point S1 22.63
Daily Pivot Point S2 22.39
Daily Pivot Point S3 22.04
Daily Pivot Point R1 23.23
Daily Pivot Point R2 23.58
Daily Pivot Point R3 23.83

Source: Fx Street

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