Silver Price Analysis: XAG/USD tests $22.00 but dived below the 200-DMA after US data

Silver Price Analysis
  • Recently, the price of silver dropped sharply after good news about jobs and housing in the US.
  • The ECB surprised the markets by raising rates by 50 basis points. The next meetings are live.
  • Analysis of the XAG/USD Price: To keep going down, stay below $21.80.

After hitting a daily high of $22.08, the price of silver goes up and down, losing some of what it had gained. The European Central Bank (ECB) surprised the markets by raising interest rates by 50 basis points (bps) at a time when the financial markets were in turmoil and Credit Suisse (CS) was close to going bankrupt. At the time this was written, the XAG/USD trades for $21.54.

Unemployment claims in the US dropped, warranting further action by the Fed

Most global stocks are going down, but the Nasdaq 100 is the only one that is going up. The European Central Bank (ECB) raised interest rates by 50 basis points (bps) and said that inflation is still too high. But the statement didn’t say anything about how monetary policy decisions would be made in the future.

The US economic calendar showed that the number of unemployment claims, as reported by the US Bureau of Labor Statistics (BLS), went down below the 200K mark, which shows that the job market is tight. Market participants thought Initial Jobless Claims would go up by 205K, but they went up by 192K instead. At the same time, housing data, led by Housing Starts and Building Permits, beat expectations. This shows that the economy is strong even though the Fed is tightening rates quickly.

The US Dollar Index (DXY), which fell 0.26% to 104.478, shows that the dollar is still under pressure. US Treasury bond yields are gaining some ground, with the 2-year bond yield going up 13 basis points to 4.019%. On the other hand, the 10-year benchmark note rate is now 3.432%, which is down two basis points and helps the XAG/USD pair.

What to watch?

Industrial Production, Capacity Utilization, and the University of Michigan (UoM) Consumer sentiment will all be on the US economic calendar.

XAG/USD Technical analysis

Two days in a row, the XAG/USD reached $22.00, but it didn’t stay there. This showed that sellers were determined to keep the price below $22.00. Why? Because after the two attempts, the XAG/USD fell below the intersection of daily Exponential Moving Averages (EMAs), especially the 200-day at $21.78. So, the path with the least amount of resistance is down. The first support for the XAG/USD would be $21.50, then the 20-day EMA at $21.29, and finally the number at $21. On the other hand, a daily close above $22.00 could open the door to more gains.


Source: Team CurrencyVeda