Silver price snapped a three-session losing streak on Thursday as it rose by 1.2 percent in the European session to trade at $26.93 per ounce. XAGUSD is finding stability as the market repositions itself for impending interest rate cuts by the Federal Reserve. Most analysts opine that the sharp declines witnessed across the board this week was mostly panic-driven correction, with no data to confirm recession claims.
Markets returned to the upside in the last two days after flashes of Black Monday triggered panic. The recovery has shifted attention to the Fed, with speculations of potential deep cuts of up to 100 basis points. This has restored confidence that a recession could be averted, and could provide support for silver price in the coming days. The grey metal’s industrial demand outlook had recently taken a hit after disappointing economic data from China and the United States. Also, silver’s safe haven status provides support to XAGUSD in low-interest environments.
The 2-hour chart below shows that silver price is currently on an upward momentum. The commodity’s price is above the VWMA, which stands at $26.92 as of this writing. Note that the VWMA is marginally below the $27.00 psychological mark, making that mark a potential support level. Meanwhile, the stochastic oscillator is at 89, confirming a strong bullish momentum.
XAGUSD will likely be on the upside trajectory if the action stays above the 27.00 pivot, as seen on the 30-minute chart. With the buyers in control, the pair will likely encounter the first resistance at 27.20. However, extended control could break past that barrier and send silver higher to test 27.40. On the other hand, a move below 27.00 will signal a shift of control to the sellers. In that case, the first support could come at 26.87. However, if they extend their control at that mark, they will likely breach that support, invalidating the upside narrative and potentially taking XAGUSD to test 26.74.
This post was last modified on Aug 08, 2024, 13:27 BST 13:27