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XAGUSD Long-term Trend is Changing to an Upward One

11/9/2022 1:41 PM

The XAG/USD pair is actively adding in value, preparing to test the 22.40 mark. The activity of trading in the market remains reduced on the eve of the announcement of the results of the preliminary elections to the US Congress. Political uncertainty forces investors to fix profits in long positions on the USD, which leads to an increase in risky assets, which can include the XAG/USD pair.

According to the latest data, Republicans have advanced to control of the House of Representatives, gaining 219 seats against 216 for Democrats. A third of voters said that inflation has become a decisive factor for them when voting. The final results will be known within a few days, after which the USD exchange rate will determine the further direction.

Silver prices are under pressure from the rhetoric of representatives of the National Health Commission of the People's Republic of China, who insist on continuing the policy of "zero tolerance" for COVID-19 to prevent imported cases of the disease and the growth of infections within the country. With the lifting of strict restrictions, the demand for the asset may increase due to the return to full-fledged operation of enterprises using metal in production.

The long-term trend is changing to an upward one. If at the end of the week the price consolidates above the level of 20.80, it will be possible to assume further growth of the trading instrument with a target at 22.40, at the breakout of which the price is likely to reach the level of 24.25. When the asset returns to the resistance level of 20.80, the "bears" can take control of the situation again and send silver quotes to the support area of 18.51–18.22.

The medium-term trend changed to an uptrend last week. The price continued to grow and reached the target zone 2 (21.65–21.48), in case of its breakout by buyers the next growth target will be target zone 3 (23.35–23.18). The key trend support is shifting to 19.92–19.75. When the price is corrected to this area, it will be possible to consider buying metal with a target at the current week's maximum of 21.60.

Resistance levels: 22.40, 24.25. | Support levels: 20.50, 18.51, 18.22.

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