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XAGUSD "Bulls" Increase Positions in the Asset

2/2/2023 11:11 AM

The XAG/USD pair is showing active growth, testing 24.20. The instrument retains its upward momentum, formed the day before after the publication of the final minutes of the two-day meeting of the US Federal Reserve, at which the regulator raised the rate by only 25 basis points, and also signaled in favor of a possible continuation of a weak tightening of monetary policy in the future. Despite the rather "hawkish" comments of the Chair of the Fed, Jerome Powell, that it is somewhat premature to talk about a victory over inflation, this was not enough for the markets.

Today, the focus of investors' attention is shifting to the meetings of the European Central Bank (ECB) and the Bank of England, which, according to current forecasts, will increase the value by 50 basis points and comment on their plans for the near future. Unlike the US Federal Reserve, the European and British regulators are noticeably limited in their further actions, given the proximity of their economies to recession. However, many analysts also expect quite "hawkish" statements from their representatives.

The week will end with the publication of the January report on the US labor market, which, however, does not promise any support for the dollar. The growth in the Nonfarm Payrolls may slow down from 223.0 thousand to 185.0 thousand, and the Unemployment Rate may correct from 3.5% to 3.6%.

According to the report of the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in silver amounted to 25.7 thousand against 31.5 thousand a week earlier. "Bulls" significantly reduced the gap in positions: their number held by swap dealers is 40.592 thousand against 47.117 thousand for "bears". This week, sellers have increased the number of contracts by 1.389 thousand, and buyers have increased it by 5.727 thousand, which indicates the return of investors to active purchases of the asset.

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD has reversed to growth having formed a new buy signal (located above the signal line). Stochastic is showing similar dynamics; however, the indicator line is already approaching its highs, indicating the risks of overbought instrument in the ultra-short term.

Resistance levels: 24.20, 24.42, 24.67, 25.00. | Support levels: 24.00, 23.60, 23.32, 23.00.

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