During the Asian session, the XAG/USD pair is growing moderately, correcting after yesterday's decline, as a result of which it failed to consolidate at local highs from October 10, and is testing the level of 19.30 for a breakout with the support of corrective sentiment in the US currency.
The reason for the appearance of upward dynamics was the comments of the head of the US Federal Reserve, Jerome Powell, on a more comprehensive and balanced approach to further tightening of monetary policy, starting from the next meeting. The markets have decided that the interest rate will rise only by 50.0 basis points in December, although a lot will still depend on the state of the economy and the dynamics of inflation, which remains alarmingly high. Now the indicator has increased by 75.0 basis points, which, against the background of the "hawkish" rhetoric of the world's leading regulators, is putting pressure on the asset's position.
Yesterday, the decline in US bond yields slightly supported the precious metal: 10-year bonds fell 5.1 basis points from the last close to 4.001%, while 30-year bonds lost about 1.5 basis points. In turn, the pressure on silver positions is still being exerted by the risks of a further slowdown in the industrial sector: on Wednesday, investors reacted negatively to the decline in the October German Manufacturing PMI from S&P Global from 45.7 to 45.1 points.
According to the latest report from the US Commodity Futures Trading Commission (CFTC), last week, the number of net speculative positions in silver was –0.1K against 1.3K a week earlier. Sellers still hold the lead in positions with producers with 30.039K against 6.723K transactions with buyers, and this week the “bears” increased the number of their contracts by 0.862K, while the “bulls” reduced them by 1.245K.
On the daily chart, Bollinger Bands are rising moderately: the price range is narrowing, reflecting the ambiguous nature of trading in the short term. The MACD turned into a downward plane, forming a poor sell signal (the histogram is below the signal line). Stochastic turned horizontal in the center of its working area, indicating a fragile balance of power in the ultra-short term.
Resistance levels: 19.50, 19.74, 20.00, 20.48. | Support levels: 19.20, 19.00, 18.75, 18.29.