Silver prices fluctuated Monday morning as investors pondered the latest US jobs number and better-than-expected Chinese services data. The XAG/USD pair was trading at 18, which was slightly above last week’s low of 17.55. It’s down more than 20% this year as the US dollar index jumped to its highest level in over 20 years.
US Dollar Index and Silver Prices
Silver is a leading industrial and precious metal used in multiple industries. Its performance tends to react to the strength of the global economy and the US dollar’s performance. Data released last week showed that global manufacturing activity slowed in September. For example, activities in China shrank as companies faced numerous challenges such as: B. falling water levels in major rivers.
Silver prices also fluctuated following the latest US jobs numbers. Data showed that the country’s economy added over 320,000 jobs in August after adding more than 528,000 jobs the previous month. The unemployment rate rose to 3.7% while wage growth came in lower than expected. Still, the US dollar index rose after the report as analysts expect the Fed to tighten further. The DXY index rose over 25% on Monday, up 0.40% and near $110. Silver has an inverse relationship with the US dollar.
Silver Price Prediction
The daily chart shows that silver has been in a strong bearish trend for the past few months. It managed to break below the key support level at $18.17 on July 15. In doing so, it invalidated the double bottom pattern that was forming. In most periods, this pattern is usually a bullish sign.
It also fell below the 25-day and 50-day moving averages, while the stochastic oscillator is trading sideways below the oversold level. Therefore, silver is likely to continue falling in the near term, with the next key support at $16.50.
XAG/USD support and resistance levels
The bearish view is supported by the highly accurate InvestingCube S&R indicator. As shown below, the indicator has a bearish view, with the first two support levels located at $17.68 and $17.25. The stop loss for this trade is 18.84. You can subscribe to the highly rated S&R indicator here.
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