Daily Analysis For Silver (XAG/USD) 14-06-2023

Daily Analysis For Silver (XAG/USD) 14-06-2023

Sliver (XAG/USD) Analysis


Key Points: -



·       The price of silver is steadily advancing towards the $24.00 level, supported by the US Dollar Index reaching a new intraday low of 103.21.


·       Further downward movement is anticipated as a neutral policy stance from the Federal Reserve (Fed) would reduce the policy divergence between the Fed and other central banks.


·       Silver experienced a strong buying response after a failed attempt to break below the Rising Channel pattern.


Today's Scenario: -


The price of silver (XAG/USD) has surpassed the immediate resistance level of $23.86 and is now edging closer to the $24.00 barrier during the European session. The strength in silver can be attributed to market expectations of a forthcoming announcement by the Federal Reserve (Fed) regarding a neutral interest rate policy.


During the European session, S&P 500 futures have recorded gains as hopes of additional interest rate hikes by the Fed have diminished. The market participants' risk appetite remains robust, leading to increased demand for assets perceived as risky.


The US Dollar Index (DXY) has reached a new daily low at 103.21. Further downside movement is anticipated if Fed Chair Jerome Powell confirms a neutral policy stance, as this would reduce the policy divergence between the Fed and other central banks. Additionally, the yields on 10-year US Treasury bonds have significantly declined below 3.81%.


While a neutral interest rate policy is widely expected, there is speculation that the dot plot, which reflects the projections of individual Fed policymakers, may remain hawkish. Despite signs of softening inflation in the United States and some easing in labor market conditions, the current employment situation remains resilient, and inflationary pressures persist above the desired rate. Fed policymakers would need to make significant efforts to effectively address inflation and bring it comfortably around 2%.



Diagram of XAG/USD (Silver): -


Economic Events: -


Date      Event                                                                                            Impact        Currency

 02:00   (United States) API Crude Oil Stock Change                  Medium             USD

 04:15   (New Zealand) Current Account                                                  Medium NZD

 05:30   (New Zealand) Food Inflation YoY                                         Low NZD

 10:00   (Netherlands) Balance of Trade                                                          Low  EUR

 10:30   (Finland) Inflation Rate YoY                                                                 Low  EUR

 10:30   (Finland) Inflation Rate MoM                                                              Low  EUR

 10:30   (Finland) CPI                                                                                         Low     EUR

 11:30   (United Kingdom) GDP 3-Month Avg                                          Medium GBP

 11:30   (United Kingdom) Goods Trade Balance Non-EU                              High GBP

 11:30   (United Kingdom) Balance of Trade                                      Low GBP

 11:30   (United Kingdom) Construction Output YoY                       Low GBP

 11:30   (United Kingdom) Industrial Production YoY                       Low GBP

 11:30   (United Kingdom) Industrial Production MoM                            Medium             GBP

 11:30   (United Kingdom) Manufacturing Production YoY             Low GBP

 11:30   (United Kingdom) Manufacturing Production MoM    Medium            GBP

 11:30   (United Kingdom) Goods Trade Balance                                            High GBP

 11:30   (United Kingdom) GDP YoY                                                                 Low  GBP

 11:30   (United Kingdom) GDP MoM                                                             High  GBP

 11:30   (Germany) Wholesale Prices MoM                               Medium EUR

 11:30   (Germany) Wholesale Prices YoY                                  Medium EUR

 12:30   (China) FDI (YTD) YoY                                                                   Medium   CNY

 12:30   (Slovakia) Inflation Rate MoM                                                            Low  EUR

 12:30   (Slovakia) Inflation Rate YoY                                                                Low  EUR

 12:30   (Slovakia) Core Inflation Rate MoM                                      Low EUR

 12:30   (Slovakia) Core Inflation Rate YoY                                        Low EUR

 12:30   (Slovakia) CPI                                                                                      Low      EUR

 13:30   (France) IEA Oil Market Report                                                   Medium  EUR

 14:30   (Euro Area) Industrial Production MoM                                     Medium EUR

 14:30   (Euro Area) Industrial Production YoY                                              Low  EUR

 14:30   (Montenegro) GDP Growth Rate YoY                                                Low  EUR

 15:00   (Germany) 10-Year Bund Auction                               Medium  EUR

 15:30   (Portugal) Inflation Rate MoM                                                          Low    EUR

 15:30   (Portugal) Inflation Rate YoY                                                             Low    EUR

 15:30   (Portugal) CPI                                                                                     Low       EUR

 15:30   (Ireland) Residential Property Prices YoY                                          Low  EUR

 15:30   (Ireland) Residential Property Prices MoM                       Low EUR

 16:30   (United States) MBA 30-Year Mortgage Rate                Medium USD

 16:30   (United States) MBA Mortgage Applications                      Low USD

 16:30   (United States) MBA Mortgage Refinance Index                              Low USD

 16:30   (United States) MBA Mortgage Market Index                                  Low USD

 16:30   (United States) MBA Purchase Index                                                 Low  USD

 17:00   (United Kingdom) NIESR Monthly GDP Tracker                               Low GBP

 18:00   (Canada) New Motor Vehicle Sales                                     Low  CAD

 18:00   (United States) Core PPI MoM                                                  Medium    USD

 18:00   (United States) Core PPI YoY                                                             Low    USD

 18:00   (United States) PPI YoY                                                                      Low     USD

 18:00   (United States) PPI MoM                                                     High  USD

 20:00   (United States) EIA Heating Oil Stocks Change                                  Low USD

 20:00   (United States) EIA Refinery Crude Runs Change                              Low USD

 20:00   (United States) EIA Crude Oil Stocks Change               Medium USD

 20:00   (United States) EIA Distillate Stocks Change                      Low USD

 20:00   (United States) EIA Gasoline Production Change                             Low USD

 20:00   (United States) EIA Crude Oil Imports Change                                 Low USD

 20:00   (United States) EIA Gasoline Stocks Change                Medium USD

 20:00   (United States) EIA Cushing Crude Oil Stocks Change         Low              USD

 20:00   (United States) EIA Distillate Fuel Production Change         Low              USD

 21:00   (United States) 17-Week Bill Auction                                                 Low USD

 23:30   (United States) Fed Interest Rate Decision                          High              USD

 23:30   (United States) FOMC Economic Projections                        High              USD

 23:30   (United States) Interest Rate Projection - 1st Yr                           Medium            USD

 23:30   (United States) Interest Rate Projection - 2nd Yr                         Medium            USD

 23:30   (United States) Interest Rate Projection - Current        Medium            USD

 23:30   (United States) Interest Rate Projection - Longer                        Medium             USD


Buy Scenario: -


The immediate hurdle for the XAG/USD pair lies at the $24.00 mark, coinciding with the 38.2% Fibonacci retracement level. Any further upward movement could attract new sellers and encounter resistance near the $24.50-$24.55 supply zone, which aligns with the 50% Fibonacci retracement level. However, if a convincing breakthrough occurs, the XAG/USD pair may aim to reclaim the psychological level of $25.00 and continue its positive momentum towards the $25.35-$25.40 resistance zone. In such a scenario, bullish investors might make a fresh attempt to surpass the $26.00 round figure. Till we did not recommend buying Silver (XAG/USD).


Sell Scenario: -


The XAG/USD pair could face vulnerability, potentially leading to further downside below the monthly low around the $23.25 region. This could result in an accelerated decline towards the round figure of $23.00. If selling pressure continues, the next target would be the $22.70-$22.65 area, which represents a two-month low reached in May. Eventually, the commodity may test the $22.00 level. Till we do not advise selling silver (XAG/USD).


Support and Resistance Level: -

 Support           Resistance  

 S1 23.38   -     R1 24.19

 S2 23.09  -      R2 24.70

 S3 22.58  -      R3 24.99


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