Current trend

As a result of the US Fed maintaining the interest rate at the peak level of 5.50% over the past 20 years, the price of XAG/USD corrected to 29.06.

The head of the regulator Jerome Powell said that the regulator is approaching a reduction in the cost of borrowing: the next meeting is scheduled for September 18, and swap markets, according to the Chicago Mercantile Exchange (CME) FedWatch Instrument, estimate the probability of a reduction in the indicator by 25 basis points at 86.5%. This weakened the American dollar at the moment but thanks to an effective economic policy, it retains growth potential, and yesterday’s strengthening of the XAG/USD rate to 29.06 should be perceived as a correction.

The trading instrument is trading in a long-term downward trend, formed at the end of July after breaking the support level of 28.70. Then the price reached the support level of 27.55, where it turned into a correction and tested the resistance level of 29.06. At the moment, short positions, with the target at 27.55 are relevant, after overcoming which a decline, with the target at 26.26 is expected. If the asset consolidates above 29.06, growth to the resistance level of 30.71 is likely.

The medium-term trend is downward, and within its framework, at the end of July, the quotes reached zone 2 (27.90–27.67), where a correction began to the trend resistance area of ​​29.83–29.60, where short positions, with the target at the July low of 27.35 are relevant. In case of a breakout of the key resistance level upwards, the medium-term trend will change to an upward trend, and long positions, with the target at 32.13–31.90 can be considered.

Support and resistance

Resistance levels: 29.06, 30.71.

Support levels: 27.55, 26.26, 25.67.

Trading tips

Short positions may be opened from 29.06, with the target at 27.55 and stop loss 29.55. Implementation period: 9–12 days.

Long positions may be opened above 29.55, with the target at 30.71 and stop loss 29.05.