Current trend

The XAG/USD pair shows a slight decline, remaining close to 23.10. The day before, the instrument showed an active decline, reacting to the publication of the results of the US Federal Reserve meeting, but still closed in the green zone, since the decisions of the American regulator were included in the quotes from the very beginning.

The Fed decided to keep the interest rate at 5.50%, but improved its forecasts for Gross Domestic Product (GDP) and the Unemployment Rate for 2023 and 2024. At the same time, the regulator adjusted expectations for annual inflation from 3.2% to 3.3%. US Federal Reserve Chairman Jerome Powell, making comments, noted that reducing price pressure to target levels of around 2.0% will take a long time.

This week there will also be meetings of British and Japanese regulators, the results of which may have an impact on the dynamics of the instrument. Markets expect the Bank of England to raise interest rates by 25 basis points to 5.50%, after which policymakers are likely to try to take a wait-and-see approach given that recent data reflected a decline in the Consumer Price Index.

Today, the market will also focus on macroeconomic statistics from the United States on the dynamics of Initial Jobless Claims and Existing Home Sales for August. Current forecasts suggest a modest increase in the number of Initial Jobless Claims from 220.0 thousand to 225.0 thousand, while Existing Home Sales could correct from 4.07 million to 4.10 million after a decline of 2.2% in the previous month.

According to a report from the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in silver decreased from 26.8 thousand to 18.0 thousand. The "bears" still hold the lead, but according to the report on positions with swap dealers balance sheet, they hold 35.406 thousand positions versus 33.068 thousand for the "bulls". Last week, buyers increased the number of contracts by 0.267 thousand, and sellers decreased it by 3.761 thousand, which signals a return to neutrality.

Support and resistance

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is narrowing, reflecting multidirectional nature of trading in the short term. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic, having reached the level of "80", reversed into a downward plane, signaling the risks of a corrective decline in the ultra-short term.

Resistance levels: 23.32, 23.60, 23.83, 24.00.

Support levels: 23.00, 22.70, 22.46, 22.21.

Trading tips

Short positions may be opened after a breakdown of 23.00 with the target at 22.46. Stop-loss — 23.32. Implementation time: 2-3 days.

A rebound from 23.00 as from support followed by a breakout of 23.32 may become a signal for opening new long positions with the target at 23.83. Stop-loss — 23.00.