XAG/USD forming a bullish harami as bulls target $23.00

  • Silver is flat after entering a week of losses, although nearing the end of the New York session, silver is flat.
  • The US 10-year T-bond yield is unchanged at 1.777%, despite Fed policymakers targeting a cluster of rate hikes in March.
  • XAG/USD Technical Outlook: Bearish bias but upside risks remain as illustrated by the bullish Harami.

Silver (XAG/USD) is grinding higher during the North American session, trading at $22.48 at the time of writing. Market sentiment remains upbeat with US stock markets trading in the green while the US dollar remains under heavy downward pressure. The US Dollar Index, a measure of the greenback against a basket of six peers, is down nearly 0.70% to 96.61.

Meanwhile, the US 10-year Treasury yield, which weighs on non-yielding assets if it rises, is unchanged at 1.777%.

Regional Federal Reserve Presidents back interest rate hikes

An absent US economy list kept precious metals investors glued to their screens as Fed spokesmen crossed the lines. Over the weekend, Atlanta Fed President Raphael Bostic (2024 voter) said he plans three rate hikes through the end of 2022 and would not count a 50 basis point hike against the Federal Funds Rate (FFR).

Earlier Monday, San Francisco Fed Chairwoman Mary Daly (2024 voter) said that “inflation is too high,” adding that the Federal Reserve is “not behind the curve at all.” It’s worth noting that if the FFR ends at 1.25% in 2022, Daly said that “that’s quite a tightening but still supports the economy.”

An hour later, Kansas City Fed President Esther George (2022 voter), leaning towards the hawkish bias on the FOMC board, noted that the risks of a “big” balance sheet should not be ignored. Additionally, she said it may be “appropriate to move earlier on the balance sheet compared to the Fed’s last tightening cycle.” Notably, a steep path for rate hikes combined with “modest” balance sheet shrinking could result in greater financial risk.

The US economy list will feature December’s JOLTS opening report on Tuesday. This, along with ISM manufacturing prices and the Dallas Fed Index for January, could give XAG/USD traders some clues on the US Dollar.

XAG/USD Price Prediction: Technical Outlook

From a technical perspective, XAG/USD is sloping down. Nonetheless, the last couple of trading sessions failed to break below a 1-month uptrendline that offered support in the range of around $22-$3545.

On the upside, initial resistance would be the 50-day moving average (DMA) at $22.91. A break of the latter would expose the 100-DMA at $23.22. A break above this would open the door for a daily high test on Jan 3rd at $23.40.

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