Published On: Mon, May 1st, 2017

XAG/USD: general review


Current trend

Silver continued to fall and lost the most positions among all other precious metals last week. It dropped by 3.6 to the level of 17.00-17.15 which is its 6-weeks minimum. Fundamentally, this dynamics was caused by less tension in Syria and around North Korea, as well as by the results of the first round of French elections. It was also supported by the rhetorics of the recent statements of FOMC members aimed at levelling obvious signs of economic slowdown which supported US dollar. However, the potential of military and political conflicts and political uncertainty is high. French elections are going on, and the result is still not final. This view of the situation allows one to see the movement of silver as technical and aimed at choosing the best options for opening long positions.

A number of important releases is due from the USA today: a statement by the US Minister of Finance Stephen Mnuchin at 13:45 (GMT+2), information on personal income and expenditure with negative forecasts at 14:30 (GMT+2), and at 16:00 (GMT+2) — Manufacturing PMI and Inflation Build-Up Index (both with negative outlooks). According to the latest events, investors react to intonations and rhetorics of govenment officials better than to actual economic indicators.

The main scenario for today will be further weakening of silver.

Support and resistance

Support levels: 16.45, 16.80, 17.10.

Resistance levels: 17.35, 17.70, 18.25. 

Trading tips

Shortpositions may be opened at the market price with targets at 16.80, 16.45 and stop-loss at 17.25.

If the price consolidates above 17.35, long positions may be opened with targets at 17.70, 18.25 and stop-loss 17.10.

The period of implementation is up to three business days.

Forex Analysis

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