Silver Pauses Below $59 as Traders Brace for 8 Major US Data Releases
Silver levels off near $59 as market players start to think about what the Fed might do, and a whole heap of US data comes out.
Quick overview
- Silver prices are stabilizing around $59 as market participants anticipate upcoming US economic data and potential Fed interest rate cuts.
- The US Dollar Index remains near recent highs, but market sentiment is cautious ahead of significant economic reports.
- Key US data releases today include ADP Employment Change and Import Prices, which could influence market expectations for the Fed's next meeting.
- Silver's technical analysis shows it is holding steady below resistance levels, with potential trading opportunities emerging for both conservative and aggressive traders.
Silver levels off near $59 as market players start to think about what the Fed might do, and a whole heap of US data comes out. The momentum is losing steam, and it’s all about where the next break will come from.
The Dollar Stays Put as Markets Wait for a Ton of US Data
The US Dollar Index is sitting pretty close to its recent highs, but don’t think for a second the market is convinced – it’s more cautious than anything. There’s a lot of chatter about the Fed possibly cutting interest rates at the next meeting, and with tons of US data coming out today, traders are bracing for a wild ride.
On Tuesday, investors waded through a whole bunch of important statistics without much reaction from Fed Chair Jerome Powell or board member Michelle Bowman. Instead, the RCM/TIPP Economic Optimism Index rose to 47.9, well above the 44.1 forecast and a hair above last month’s level, suggesting consumers are slightly more optimistic about the future.
Car sales also held their own, with Wards Total Vehicle Sales hitting 15.6M, just a little bit above expectations last month.
All this data gave the dollar a boost, but didn’t change the fact that most people expect the Fed to ease up a bit in the coming months.
What to Watch For Today
A long list of US data is about to drop, and each one of these has the potential to move the dial on expectations for next week’s meeting:
- ADP Employment Change: is expected to be way off its previous reading of 42K at a paltry 5K.
- Import Prices m/m: are forecast to come in at 0.1%, a drop from last time.
- Capacity Utilization: is expected to be at 76.9%, below the last time.
- Industrial Production is expected to stay put at 0.1%.
- Final Services PMI: forecast to be 55.0.
- ISM Services PMI: forecast at 52.0.
- Crude Oil Inventories: expected to drop by 1.9M after last week’s build of 2.8M.
[[XAG/USD-graph]]
All of these data points will have a significant impact on whether the dollar rises or falls and on the price of precious metals.
Silver (XAG/USD) Technical Analysis
Silver is sitting pretty steady below the $58.90-$59.00 resistance level, which is also a zone of high demand. The rally is running on empty, with quite a few small candles forming beneath resistance but not giving much of a signal that the trend is shifting.
Despite all this, the overall trend is still healthy, and the price is holding firm above the 20-EMA and that upward-sloping trendline from November.
Key levels to watch out for include:
- 23.6% Fib – $56.47: A first line of defense.
- 38.2% Fib – $54.97: Prefer to see the price get there if sellers kick in.
The RSI has eased off from being too overbought and has given us a bit of a bearish divergence – the momentum is winding down, but not quite enough to say we’ve got a major reversal.
Silver (XAG/USD) Trade Opportunity
If you’re a patient trader, a long entry near $56.47-$55.00 is looking pretty good – think about that 20-EMA and the fib levels – and a bounce confirmed by a good ol’ fashioned bullish engulfing candle or a hammer would be a great buy signal. For more aggressive traders, a breakout above $59.00 is a clear signal that the price is off and running again.
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