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Silver Quotes are Developing an Uncertain Bullish Momentum

2/9/2023 11:16 AM

During the Asian session, the XAG/USD pair grew moderately, developing the uncertain "bullish" momentum formed yesterday. Currently, the instrument is testing 22.40, retreating from the local lows of December 6.

Positive dynamics are developing against the backdrop of the weakness of the US dollar. Wednesday's trading proceeded against the backdrop of discussions on the results of the speech of US Federal Reserve Chairman Jerome Powell at the Washington Economic Club, and although the official announced the need for further tightening of monetary policy, investors were disappointed by not hearing "hawkish" signals from him. Powell, in turn, noted the effectiveness of the measures taken by the department in reducing inflationary risks.

On Friday, market participants will pay attention to the publication of the consumer sentiment index from the University of Michigan, which is expected to correct the value from 64.9 points to 65.0 points, as well as the speech of the representative of the regulator Christopher Waller. Also, Chinese statistics on consumer inflation for January will be released simultaneously: forecasts suggest an acceleration of the indicator by 0.7% after the zero dynamics of the previous month and an increase from 1.8% to 2.1% YoY.

There is a slight outflow of traders' positions on the silver contract market: according to the latest report from the US Commodity Futures Trading Commission (CFTC), last week, the number of net speculative positions in silver amounted to 23.4K against 25.7K a week earlier. The "bears" retain their leadership, demonstrating a significant advantage: the number of contracts for sellers consolidates around 41.712K against 6.279K for buyers. This week, the volume of short deals decreased by 2.366K contracts and long positions by 0.697K, which indicates a slight drop in demand for the asset.

On the daily chart, Bollinger Bands are steadily declining: the price range is expanding from below, clearing the way for the "bears" to new local lows. The MACD indicator tries to reverse upward but keeps a sell signal (the histogram is below the signal line). Stochastic demonstrates similar dynamics, being close to its lows.

Market participants should look at the possibility of corrective growth in the short and/or ultra-short term.

Resistance levels: 22.50, 22.70, 23.00, 23.32. | Support levels: 22.21, 22.00, 21.64, 21.42.

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