This precious metal has been pacing back and forth inside a range visible on its short-term charts.
Can silver break out soon or is another bounce in the cards?
Silver (XAG/USD): 1-hour
It’s the range that keeps on giving!
Silver bounced off the ceiling once more, setting its sights back on the floor around the $23.235 mark.
Technical indicators are pointing to more bearish vibes, as the 100 SMA is below the 200 SMA while Stochastic is heading south.Stronger downside momentum might even lead to a break below support and a corresponding drop that’s the same height as the rectangle pattern.
Just be mindful that the oscillator is also dipping close to the oversold region to reflect exhaustion among sellers. Turning higher might signal that bullish pressure could pick up again.
Earlier this week, the precious metal’s rally got cut short when the U.S. advanced GDP release turned out better than expected, resulting in a sharp pop higher for the dollar.
Up next, we’ve got the U.S. core PCE price index for release, and another strong showing could mean more upside for the U.S. currency.
Keep in mind that this report is said to be the Fed’s preferred inflation measure, so any significant acceleration in price pressures could keep the central bank on its aggressive tightening path.
Number crunchers are counting on a small uptick from 0.2% to 0.3% for December. Weaker than expected results could dash rate hike hopes for the latter part of the year, possibly allowing commodities like silver to take advantage of dollar weakness.
In any case, make sure you check out the average XAG/USD volatility when setting entries and exits!
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