XAG / USD struggled at $ 25.00 and retreated to the $ 24.50 region on falling US yields

  • XAG / USD ends the week on the wrong foot despite falling US bond yields.
  • XAG / USD tumbled during the day as risk averse market sentiment boosted the greenback.
  • The Fed’s Waller and Clarida would like bonds to be rejuvenated faster.
  • XAG / USD Technical Outlook: An inverted head and shoulders target in the USD 28.20-30 range.

As Wall Street closes, Silver (XAG / USD) ended the session nearly 1% down, trading at $ 24.58 at the time of writing. Friday’s meeting witnessed subdued sentiment in the equity markets. The S&P 500 and Dow Jones Industrial posted losses between 0.11% and 0.74%. The outlier was the Nasdaq 100, up 0.56%. Safe-haven currencies ended the day in the green on the Forex market, while risk-sensitive currencies such as the AUD, NZD and GBP fell.

On the night’s session, silver remained subdued, trading without a trend in the $ 24.75-93 area. However, some Fed speakers boosted demand for the greenback throughout the American session, which ultimately impacted the white metal, which fell into the $ 24.50 area.

The Fed’s Waller and Clarida would like bonds to be rejuvenated faster

On Friday, Fed Governor Christopher Waller announced that the Federal Reserve could double its QE to $ 30 billion per month by April 2022. Waller added that quickening the pace would give the Federal Reserve scope for rate hikes as soon as Q2 2022.

Later that day, Fed vice chairman Richard Clarida said it “may very well be appropriate” to discuss accelerating bond tapering, in line with St. Louis President James Bullard. He also noted that he sees upside risks to inflation and added that the economy is very strong as it looks like the fourth quarter is going to be very good.

The yield on 10-year government bonds closed the bond market at 1.55%, a loss of three and a half basis points.

XAG / USD Price Prediction: Technical Outlook

Silver (XAG / USD) shows that an inverted head and shoulders ratio has just formed on the daily chart. It would need confirmation above the neckline, however, despite the price action closing below the neckline for the day on Friday. Despite the above, the non-yielding metal has been on an upward trend in the short term, with 50- and 100-day moving averages (DMAs) below the spot price.

However, to accelerate the uptrend, the silver bulls would have to recapture the 200 DMA at $ 25.26. This result would open the door to further gains, although the XAG / USD bulls would find some hurdles on their way north.

The first resistance would be the August 4th high of $ 26.00. A sustained break in the latter would expose the July 14th high at $ 26.44, followed by the psychological $ 27.00.

On the other hand, the initial support on failure of the 100-DMA would be at $ 24.06

Comments are closed.