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Silver gains as the risk of the FED rate hike broadens. Rate hikes are most likely to be on the table before the FED as the inflation is overpassing the expectations of the Federal Reserve.
Silver continues its uptrend since September 30, 2021 when it hit the newly lows of the year. The uptrend is backed by the FED’s tapering plan which should start in November. Despite the positive US Jobless Claims, the US Dollar index remains under pressure below the 93.7 level.
The US Dollar index is still vulnerable below the 93.7 which is a crucial resistance. The DXY chart I was posting in my previous articles still seems to be valid and the USD might drop to 92.5 – 92.4 levels to complete the expanding diagonal pattern.
Chart by TradingView
CFTC net positions as of October 12, 2021 demonstrates a dominance of long positions on both non-commercial and nonreportable positions, whereas commercial positions are still on short. The total number of long traders in each category is larger than short traders. This shows a sentiment of traders and looks like the number of traders, who believe that Silver could go higher is larger.
As for the technical analysis, Silver on a daily chart is currently testing a resistance level formed by MA100. If XAGUSD doesn’t overtake this resistance, it might drop to $23.5 to find the next support backed by the EMA50.
Chart by TradingView
The pullback to $23.5 could be a sign for Silver to regain power before the next uptrend move. This pullback will also be a strong support of the next bullish move as it will be a retest of October 15’s resistance as support.
RSI indicator shows signs of a correction ahead, MACD remains bullish. Hence, after a slight correction, XAGUSD may continue the uptrend up to $26 and $26.8. FED Chairman Jerome Powell will have a speech later today, during the speech Mr. Powell will give the sights of the FED about the economic projections and future actions by the Federal Reserve, so keep that on track.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire