XAG Faces Trendline at $31, as Silver Price Follows Gold Higher

Yesterday, silver reached a high above $31, continuing its strong upward momentum from last week. However, despite this rise, silver has been hitting lower highs since May, unlike gold, which has been setting record highs. Yesterday’s rally in silver stalled at a falling trendline just above $31, lower than the previous two highs, signaling weakness.

Silver price failed to hold above $30 yesterday

We are looking to open a sell Silver signal after the price stagnated yesterday, as the upward movement appeared to weaken in comparison to the sharp bullish move seen last week. Selling into retraces during this kind of setup offers better odds of success and a more favorable risk-reward ratio.

Silver Chart Daily – Buying Stopping at the TrendlineChart XAGUSD, D1, 2024.09.16 16:26 UTC, MetaQuotes Ltd., MetaTrader 5, Demo

Silver’s Recent Price Action

Silver turned bullish in August as the USD weakened, climbing above the $30 mark. However, it failed to sustain those gains and plummeted by over $2, finding strong support at $27.70. The 100-day Simple Moving Average (SMA) served as a crucial support level, halting the decline and aiding a recovery of over $3.5 last week as all assets gained momentum thanks to the weaker dollar.

Resistance and Potential Reversal in Silver

Silver (XAG/USD) has now surpassed a broad range, fluctuating from below $26 to above $30. While price action shows no immediate signs of a reversal, the resistance line suggests caution. A reversal candlestick pattern, such as a doji or a pin/hammer, would significantly increase the likelihood of a pullback. Should this happen, the $30 level is likely to offer strong support for the next move.

Perhaps the manufacturing report from the New York area which showed improvement helped stop the climb in Silver prices just above $31. The overall survey shows significant improvement in business activity, with optimism for the future despite ongoing challenges in employment and capital expenditures.

September New York Fed Manufacturing Survey Overview

  • General Business Conditions: 11.5 (versus -4.7 prior) – the highest reading since April 2022.
  • New Orders: 9.4 (versus -7.9 prior) – indicating a shift to growth.
  • Shipments: 17.9 (versus 0.3 prior) – a significant improvement.
  • Unfilled Orders: 2.1 (versus -7.4 prior) – showing progress.
  • Delivery Times: -1.1 (versus -3.2 prior) – a slight improvement.
  • Inventories: 0.0 (versus -10.6 prior) – stabilization in stock levels.
  • Prices Paid: 23.2 (versus 23.4 prior) – steady pricing pressure.
  • Prices Received: 7.4 (versus 8.5 prior) – a slight decline.
  • Number of Employees: -5.7 (versus -6.7 prior) – still negative but slightly better.
  • Average Employee Workweek: 2.9 (versus -17.8 prior) – a notable recovery in hours worked.
  • Supply Availability: -2.1 (same as prior).

Six-Months Ahead Expectations

  • Future Business Conditions: 30.6 (versus 22.9 prior) – optimism is rising.
  • Future New Orders: 39.9 (versus 24.8 prior) – a stronger outlook for demand.
  • Future Capital Expenditures: -2.1 (versus 8.5 prior) – a concerning decline in investment expectations.

Silver Live Chart

SILVER
Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Avatar
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments