silver price
Silver prices (XAGUSD) tanked on Wednesday on the back of increased bids on risky assets, as markets start to shake off the coronavirus bug which had seen global stocks and risky commodities drop steeply on Monday.
After breaking above the bullish pennant on the daily chart on Monday as safe-haven demand prevailed, silver prices were forced down rapidly as gold prices fell and the US Dollar surged on Tuesday. This steep and unexpected fall in silver prices terminated any hopes of completion of the measured move on the bullish pennant breakout and leaves the asset vulnerable to further downside moves.
Markets now await this evening’s FOMC decision. The rate statement and accompanying press conference by FOMC Chair Jerome Powell could create additional volatility for the pair, making for a week of volatility on the XAGUSD pair.
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Silver price had broken above the bullish pennant, but found itself unable to breach the 18.1468 resistance identified in some of my analyses for last week on the XAGUSD. The pinbar candle that formed was followed by a large bearish candle, which sent silver prices down to the 17.41483 immediate support marked by the previous cluster of lows in October 2019 and preceded by lows of September 13 2019.
Today’s candle has assumed the shape of a pinbar, which sits on the support line. Therefore, any factors which cause risk appetite to wane once more could see silver price rebounding to retest the 18.14680 resistance, with 18.65367 hanging tightly overhead.
A breakdown of the current support could target the lows of October 16 as well as a subsequent cluster of highs in role reversal found between November 8 and December 13 at the 17.18236 price level. Further support targets exist at the 16.80485 and 16.5888 price levels.