- The silver price tries to recover as the bearish bias remains strong due to the resistance of the US dollar.
- Fed Waller said more economic data is needed to say the Fed is done raising rates.
- Silver is offering a mean reversion move near the 20 EMA around $23.80.
The price of the Silver (XAG/USD) discovers buying interest near $23.50 at the beginning of the American session. The white metal tries to recover after a strong sell-off, inspired by the resistance of the US dollar. The overall bias remains negative as the Dollar Index (DXY) is expected to extend its higher run.
The S&P 500 Index opens on a negative note as market sentiment remains cautious due to deepening global recession risks. The Greenback takes advantage of downbeat global data, especially the weakness of China’s services PMI. Economic data for August fell significantly to 51.8 from the previous release of 54.1. China’s service sector is facing pressure from deflation risks due to a deteriorating demand environment.
The Dollar Index faces profit-taking after hitting a fresh five-month high near 104.80, as Federal Reserve (Fed) Governor Christopher Waller remains uncertain about the interest rate outlook. The Fed Governor told CNBC on Tuesday that economic data will guide whether the Fed needs to raise rates again, adding that he would need more data to say the Fed is done raising rates, according to Reuters. Furthermore, he added that one more interest rate hike is unlikely to send the economy into recession.
Turning to the labor market, the Fed governor noted that the rise in the unemployment rate was not surprising. The labor market has started to soften, but it is still very strong.
Silver Technical Analysis
Silver is offering a mean reversion move closer to the 20 period EMA around $23.80. The pair is trying to rally after testing the 50% Fibonacci retracement (traced from the Aug 15 low of $22.23 to the Aug 30 high of $25.02) at $23.62.
The Relative Strength Index (RSI) rises to the 40.00-60.00 range from the 20.00-40.00 bearish range, indicating that the bearish momentum has lost steam.
La Plata hourly chart
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
