Daily Analysis For Silver (XAG/USD) 26-05-2023

Daily Analysis For Silver (XAG/USD) 26-05-2023

Sliver (XAG/USD) Analysis
Key Points
• White House officials and a team led by Speaker McCarthy are actively engaged in negotiations to raise the US debt-ceiling.
• Silver price has made a solid recovery and has successfully climbed back above the 50% Fibonacci retracement level at $23.00.
• Silver price has surged above $23.00 due to a significant decline in the USD Index.
Today's Scenario: - The price of silver (XAG/USD) has comfortably surpassed the crucial resistance level of $23.00 during the early European session. This upward movement is supported by the vulnerability of the US Dollar Index (DXY) above 104.00.
The decline in the USD Index is a result of market expectations that the White House and Republican leaders will come to a bipartisan agreement, which would prevent a default by the United States Treasury. Negotiations involving White House officials and the team led by House of Representatives Kevin McCarthy are currently underway. The differences in proposed budget spending between the White House and Republican leaders have narrowed down to $70 billion from the initial proposal of $1 trillion.
Furthermore, indications of a potential pause in the Federal Reserve's tightening of monetary policy are also contributing to the strength of the silver price.
Diagram of XAG/USD (Silver)
XAG/USD
Economic Events : -
GMTEventImpactCurrency
00:30(Japan) Tokyo Core CPI YoYLowJPY
00:30(Japan) Tokyo CPI YoYLowJPY
00:30(Japan) Tokyo CPI Ex Food and Energy YoYLowJPY
02:30(Australia) Retail Sales MoMHighAUD
04:35(Japan) 3-Month Bill AuctionLowJPY
06:00(Japan) Leading Economic IndexLowJPY
06:00(Japan) Coincident IndexLowJPY
07:00(Lithuania) Retail Sales MoMLowEUR
07:00(Lithuania) Retail Sales YoYLowEUR
07:00(United Kingdom) Retail Sales ex Fuel MoMHighGBP
07:00(United Kingdom) Retail Sales ex Fuel YoYHighGBP
07:00(United Kingdom) Retail Sales YoYHighGBP
07:00(United Kingdom) Retail Sales MoMHighGBP
07:30(Switzerland) Non Farm PayrollsLowCHF
07:45(France) Consumer ConfidenceMediumEUR
08:15(Euro Area) ECB Enria SpeechLowEUR
08:40(Euro Area) ECB Lane SpeechMediumEUR
09:00(Italy) Consumer ConfidenceMediumEUR
09:00(Italy) Business ConfidenceMediumEUR
09:00(Austria) Bank Austria Manufacturing PMIHighEUR
10:10(Italy) 6-Month BOT AuctionLowEUR
11:00(France) Jobseekers TotalLowEUR
11:00(France) Unemployment Benefit ClaimsMediumEUR
11:00(Luxembourg) Balance of TradeLowEUR
13:30(Canada) Wholesale Sales MoMLowCAD
13:30(United States) Goods Trade BalanceHighUSD
13:30(United States) Wholesale Inventories MoMMediumUSD
13:30(United States) Core PCE Price Index MoMHighUSD
13:30(United States) Core PCE Price Index YoYLowUSD
13:30(United States) PCE Price Index MoMMediumUSD
13:30(United States) PCE Price Index YoYMediumUSD
13:30(United States) Personal Spending MoMHighUSD
13:30(United States) Personal Income MoMHighUSD
13:30(United States) Retail Inventories Ex Autos MoMMediumUSD
13:30(United States) Durable Goods Orders Ex Transp MoMHighUSD
13:30(United States) Non Defense Goods Orders Ex AirLowUSD
13:30(United States) Durable Goods Orders MoMHighUSD
13:30(United States) Durable Goods Orders ex Defense MoMHighUSD
15:00(United States) Michigan Consumer ExpectationsLowUSD
15:00(United States) Michigan Current ConditionsLowUSD
15:00(United States) Michigan 5 Year Inflation ExpectationsLowUSD
15:00(United States) Michigan Consumer SentimentHighUSD
15:00(United States) Michigan Inflation ExpectationsLowUSD
16:00(Canada) Budget BalanceLowCAD
18:00(United States) Baker Hughes Oil Rig CountLowUSD
18:00(United States) Baker Hughes Total Rig CountLowUSD
Today's Scenario: - Silver is facing challenges in capitalizing on its recent rebound, as it oscillates within a narrow trading range. Despite the bounce from around the $23.00 level, which also corresponds to the 50% Fibonacci retracement level of the rally seen from March to May, the white metal is struggling to make significant gains. During the first half of the European session, silver has been fluctuating between modest gains and minor losses. Currently, it is trading just below the mid-$23.00s, showing little change for the day.
Buy Scenario: - The price of silver has experienced a notable recovery, surpassing the 50% Fibonacci retracement level (plotted from the low of $19.92 on March 08 to the high of $26.08 on April 14) at $23.00 on a four-hour timeframe. However, there are still several factors that need to be considered for a bullish reversal, as the silver market remains within a Falling Channel chart pattern.
Currently, the declining 20-period Exponential Moving Average (EMA) at $23.15 is acting as a barrier for silver bulls.
The Relative Strength Index (RSI) (14) is attempting to move into the range of 40.00-60.00, indicating potential momentum.
If the price confidently breaks above the high of May 25 at $23.14, it could lead to further upside movement towards the low of May 18 at $23.48, followed by the high of May 19 at $24.00. Till we did not recommend buying Silver (XAG/USD).
Sell Scenario: - On the downside, if the price drops below the low of May 26 at $22.68, it could strengthen the US Dollar and push the price towards the 61.8% Fibonacci retracement level at $22.28, with the major support located at $22.00. Till we do not advise selling silver (XAG/USD).
Support and Resistance Level: -
SupportResistance
S1 22.58-R1 23.03
S2 22.42-R2 23.32
S3 22.13-R3 23.48

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