Silver plunged in the last hours only because the US Dollar Index has rebounded after the US data were published. The price could register a temporary decline before jumping higher again.
XAG/USD declines at the time of writing as Gold drops as well. The US Flash Services PMI increased from 60.4 to 63.1, beating the 61.6 estimates, while Flash Manufacturing PMI increased from 59.1 to 60.6 points.
Moreover, the New Home Sales jumped unexpectedly higher, from 845K to 1021K above 885K estimates. The US economy has reported good data, so a USD’s appreciation in the short term could push XAG/USD down.
Technical Analysis!
Silver flirts with the upper median line (UML) of the major descending pitchfork with acts as dynamic resistance. A valid breakout above this obstacle could signal that the price may resume its upside movement.
As you can see on the H4 chart, XAG/USD has found resistance at the R1 (26.614) and now is located at 25.985. The weekly pivot is represents the immediate downside obstacle, support. So, it could still increase as long as it stays above this level.
A temporary decline was somehow expected and is natural after the rate has touched the former highs. Personally, I believe that a valid breakout above the upper median line (UML) followed by a new higher high could really announce a larger growth in the upcoming period.
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