XAG/USD Faces Downward Pressure Amidst Rate Hike Speculations
XAG/USD navigates rate hike headwinds.
FUNDAMENTAL OVERVIEW
- The spot price of XAG/USD declines amid a strengthening US dollar as speculation about anticipated interest rate increases.
- The strengthening of the US dollar, which suggests impending interest rate increases, puts pressure on silver.
- The precious metal is under even more pressure as a result of the Federal Reserve’s decision to maintain high rates.
- under the light of aggressive Fed tactics, the credibility of XAG/USD as a “safe haven” is under doubt.
- The Federal Reserve’s rate decisions are significantly influenced by the impending PCE price index.
Due to speculators adjusting their expectations in light of potential interest rate increases, silver prices are feeling the heat and have fallen this week. The U.S. dollar has been supported by this rise largely.
Silver has come under increased pressure as a result of the ongoing strength of Treasury yields, the currency, and the Federal Reserve’s propensity to maintain high-interest rates.
Recent remarks by Chicago Fed’s Austan Goolsbee, who claimed that rates persistently over the Fed’s 2% target pose a larger threat than any restrictive central bank policy, brought attention to inflation worries. Neel Kashkari, president of the Minneapolis Fed Bank, stated on Tuesday that there is a 40% possibility the Federal Reserve will need to hike rates “meaningfully” in order to combat inflation.
SILVER TECHNICAL ANALYSIS DAILY CHART:
Technical Overview
Silver is currently trading within a down channel.
Silver is positioned below all Moving Averages (SMA).
The Relative Strength Index (RSI) is in the selling zone, while the Stochastic oscillator suggests a negative trend.
Immediate Resistance level: 23.00
Immediate support level: 24.11
How T0 Trade Silver
Silver has breached the previous day’s bottom and is currently trading in a down channel, forming three black crows. We are expecting an additional decrease if the crucial support zone around which silver is now trading breaks down.
TRADE SUGGESTION- Stop Sell – 22.22, TAKE PROFIT AT- 21.27, SL AT- 23.04.