Current trend

The XAG/USD pair is showing mixed dynamics, consolidating near strong psychological support at 31.00. The instrument is located near the local lows of October 15, which were updated during the previous session of trading.

The day before, the American currency demonstrated growth across almost the entire market spectrum, which was an expected reaction to the results of the presidential elections. The head of the White House is once again a representative of the Republican Party, Donald Trump, who is expected to pursue protectionist policies. Among other things, the new president intends to introduce protective tariffs on imported goods from China and the EU, which for allies could amount to 10.0–20.0%, and for direct competitors, such as China, 60.0–100.0%. In addition, his election program includes significant tax easing for businesses and citizens, which is expected to increase the attractiveness of investment and production. However, experts believe that such steps could cause a number of significant problems: new "trade wars" with China or the EU cannot be ruled out, which would negatively affect the global economy. For all this, the country's economy will need a strong national currency, so when implementing such a policy, the US Federal Reserve is expected to reduce borrowing costs more modestly. At the same time, the prospects for the upcoming meetings of the regulator have remained virtually unchanged: today, at 21:00 (GMT 2), the decision of the US Federal Open Market Committee (FOMC) will be announced, the result of which, with a probability of 95.0% (according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool) will be an adjustment of the interest rate by –25 basis points to 4.75%. Officials are also expected to point to another possible cut of a similar amount in December.

In addition, today, at 15:30 (GMT 2), data on jobless claims will be presented: Initial Jobless Claims for the week ended November 1 may increase from 216.0 thousand to 221.0 thousand, and Continuing Jobless Claims (for the week ended October 25) — from 1.862 million to 1.880 million.

The silver contracts market continues to correct: according to the report from the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in the precious metal fell to 60.4 thousand from 66.4 thousand. The "bulls" continue to maintain their advantage, which has somewhat narrowed amid a local outflow of investors from the asset: according to the report on positions secured by real money, their balance is 54.826 thousand against 13.657 thousand for the "bears". Last week, buyers liquidated 1.901 thousand trades, while sellers opened 4.290 thousand contracts, which indicates a slight adjustment in positions in favor of sales.

Support and resistance

On the daily chart Bollinger Bands are reversing into the descending plane. The price range is expanding actively; however, it fails to catch the surge of "bearish" sentiments at the moment. MACD is going down preserving a stable sell signal (located below the signal line). In addition, the indicator is trying to consolidate below the zero level. Stochastic, having retreated from its lows, is trying to reverse into an ascending plane, signaling significant risks of the instrument being oversold in the ultra-short term.

Resistance levels: 31.30, 31.56, 32.00, 32.29.

Support levels: 30.82, 30.50, 30.00, 29.73.

Trading tips

Short positions may be opened after a breakdown of 30.82 with the target at 30.00. Stop-loss — 31.30. Implementation time: 2-3 days.

A rebound from 30.82 as from support followed by a breakout of 31.30 may become a signal for opening new long positions with the target at 32.29. Stop-loss — 30.82.