Forex Marketz Daily Forex News – Fully Markets Update
XAG/USD (14.248)
Silver, gold’s cousin is trading with some stability as we are now near the August low price point around $13.95 per ounce. Prices have been declining for 11 trading days in a row with no corrective bounce. This latest decline in silver was caused by the rather hawkish tone taken by the Federal Reserve Board at their last FOMC meeting. Traders are expecting a rate increase over the next month or two. This could take silver to break the support at $13.95. Then could see a challenge of $12.45, which is the July 13, 2009 low price point.
Technical Analysis
With that being said, as well as looking at today’s XAG/USD technical analysis, prices are oversold. This could lead to an interim bottom with silver consolidating from $13.95 to $16.20. There is resistance at the $14.51. This is the high on Wednesday, last week. The short term trend remains bearish while below that resistance level. This could see the white metal move towards $14.12, which is the intraday low from August 27. Traders who would like to trade, what we call a fade a bounce might want to initiate a trade in that area, around $14.35 to $14.51. From a risk to reward analysis, this type of trade is acceptable.
Trade Strategy
Traders would like to move towards the midpoint price point of $13.95 to $16.10 range, will want to see a break of Wednesday high price at $14.52.
You should note that gold prices are near to breaking their trend defining level which is at $1089. This could make it hard to take a bearish tone with silver at this time.
