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  • XAG/USD bulls testing the daily and 4-hour resistance but all bullish.
  • The 10-day EMA is the supporting factor at this juncture.  

Silver has been creeping higher on the day by nearly 1% and is on target for the highest close since 18th May.  

XAG/USD has traded between a low of $27.69 and $28.17 on the day so far.

There is little rhyme nor reason for the move on Wednesday for the US dollar is in trading within familiar ranges and themes.  

In fact, the dollar edged higher on Wednesday, backing off of a near five-month low ahead of the highly anticipated US Nonfarm payrolls data on Friday.  

The dollar index DXY, which measures the greenback against six rivals, was up back to flat by the late afternoon on Wall Street to 89.8930 after recovering from an 89.8570 low and pulling back from a 90.2460 high. The index paused just ahead of the  Jan  7 levels of  89.533.

April’s much weaker-than-expected jobs data weighed heavily on the greenback last time around, so Friday’s data will be critical for the precious metals markets riding the ebb  and flow  in the greenback.  

Meanwhile, manufacturing data on Tuesday came in above expectations, but labour shortages during the month actually hampered the sector’s growth potential, which is a potential weight for the greenback and something that will be put into the balance vs inflation expectations.  

Meanwhile, traders are also weighing the implications over Monday’s news as Chinese policymakers took steps to cool the advance of its currency, the yuan,  including raising banks’ FX reserve requirements. Indirectly, as a consequence, commodities may be affected by the relative strength in the greenback.

Staying with China, ”Shanghai silver flows have notably eased, with China Smart Money funds aggressively liquidating their recently acquired length,” analysts at TD Securities said.

”Looking forward, however, if inflation is indeed transitory, then we are likely to see a prolonged period of uber-easy monetary policy, which suggests that market pricing for Fed hikes is too hawkish,” the analysts added, arguing that  this will  ultimately help precious metals to firm.  

XAG/USD technical analysis

The bulls are back in play and moving in on the 4-hour rand daily resistance in the 28.20s. The price continues to rely on the 10-day EMA as support.