XAG/USD: correction is over, growth is expected

Current trend

The price of silver went into a narrowing consolidation after a significant growth at the end of last year.

In mid-January, the instrument reached the local maximum level of 17.40, after which it consolidated below this mark in the side channel. Growth was promoted by the increased demand for metal and a significant drop in the US currency at the end of last year/beginning of this year. At the end of the last trading week, the United States published mixed data, which resulted in a reduction in US dollar sales and stabilization of the rate.

Now, there are no important releases that could increase the volatility of the price of silver in the economic calendar. In the second half of the week, special attention should be paid to the US data, namely reports on the labor market, on economic growth rates in the 4th quarter of last year, and on orders for durable goods.

Support and resistance

The current consolidation from the strong resistance level can be regarded as a correction after significant growth. In the future, the correction will be replaced by a new upward wave, the main catalyst for further growth will be the negative fundamental background for the United States and the “bullish” trading sentiments of investors. In the medium term, the instrument is expected to rise to the next strong resistance level of 18.00 — the local high of last September.

Technical indicators on the D1 chart keep the signal for an increase: MACD indicator shows a high volume of long positions, and Bollinger Bands are directed upwards.

Support levels: 16.85, 16.75, 16.55, 16.10, 15.60, 15.30, 15.00, 14.10.

Resistance levels: 17.10, 17.25, 17.40, 18.00, 18.20, 18.70.

Trading tips

In this situation, long positions may be opened from the current level with the target at 18.00 and stop-loss at 16.60.

Spot Silver

Buy Sell Spread
17.083 17.019 64

Scenario

Timeframe Weekly
Recommendations BUY
Entry Point 16.90
Take Profit 18.00
Stop Loss 16.60
Support levels 14.10, 15.00, 15.30, 15.60, 16.10, 16.55, 16.85, 16.75, 17.10, 17.25, 17.40, 18.00, 18.20, 18.70

XAG/USD: correction is over, growth is expected

The material published on this page is produced by the Claws&Horns Company and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

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