XAG / USD remains trapped below $ 23
- Silver’s upside attempts hit a cap of $ 22.80.
- The strength of the US dollar is weighing on precious metals.
- XAG / USD: sideways movement between $ 22.20 and $ 23.15.
Silver opened the week on a slightly positive note, despite failing to break above $ 22.80 amid broad-based US dollar strength. The precious metal fell into the $ 22.65 area during the US trading session to remain virtually unchanged on the daily charts.
The strength of the US dollar weighs on precious metals
Silver and precious metals generally remain on the defensive against a firmer US dollar as the market prepares for the official announcement that the Federal Reserve will curb bond purchases. The US dollar index rose about 0.15% on Monday to reverse the losses of the past two days and approach annual highs of 94.50 so far
The US dollar appreciated across the board on Monday. Investors have assumed that last Friday’s disheartening US payroll report is unlikely to deter the Fed from announcing its plan to withdraw monetary stimulus at its next monetary policy meeting in November.
XAG / USD: Consolidation between $ 22.20 and $ 23.15
From a technical perspective, the pair has consolidated within a tight range for the past week. On the flip side, XAG / USD should break the September 22nd and October 8th high at $ 23.15 to bolster bull confidence and the high of September 14th and 16th at $ 24.00 before the Try high from September 3rd at $ 24.87.
On the flip side, the immediate support is at $ 22.15 (October 6th low) and below that at $ 21.37 (September 29th low) and 20.75 (50% Fibonacci retracement of the March-August 2020 rally ).