Home Forex XAG/USD plunges despite weaker USD, falling US bond yields

XAG/USD plunges despite weaker USD, falling US bond yields

by SuperiorInvest


  • Silver was down nearly 1% from a daily high of nearly $26.00.
  • Disinflationary trends in the US economy persist, but headline figures are holding at 5.5% year-on-year.
  • The XAG/USD technical outlook suggests further downside potential and tests key support levels.

silver price slips after reaching a daily high of $25.91 after the release of US inflation data continued to show that the economy is in a disinflationary process. However, the fundamentals are sticking to the 5.5% year-on-year barrier, which could warrant further tightening by the Fed. XAG/USD is trading around 25.30s, surprisingly down almost 1%, although US Treasury yields and the US dollar (USD) remained lower.

XAG/USD Price Analysis: Technical Outlook

The daily chart of XAG/USD suggests that sellers are gaining strength, although the uptrend remains intact. The Relative Strength Index (RSI) indicator is flashing the aforementioned, with the RSI moving towards a neutral level, while the 3-day Rate of Change (RoC) is registering volatility in negative values.

If XAG/USD continues to trend lower, it would test the 20-day exponential moving average (EMA) at $25.17. In a crucial break, XAG/USD sellers will target $25.00, followed by the confluence of the 15-day uptrend line and the February 2 high, turning support around $24.60/$70. A breach of the latter would see XAG slip to the confluence of the five-month-old previous trend line of resistance, now support, and the 50-day EMA at 24.29/40.

On the contrary, XAG/USD could resume its uptrend once buyers step in and reclaim the May 9 daily low of $25.33. In this outcome, the first resistance would be the May 9 high of $25.67, followed by $26.00.

XAG/USD Price Action – Daily Chart

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