Current trend

After rising to the resistance level of 23.49 last week, the XAG/USD pair corrected to the support level of 22.62 and is preparing to overcome it under the pressure of the rising American dollar, the positive dynamics of which are developing after the publication of macroeconomic statistics: in December, the volume of retail sales adjusted 0.3% to 0.6%, above the forecast of 0.4%, and the core value – from 0.2% to 0.4%, versus expectations of 0.2%. In addition, industrial production increased by 0.1%, although analysts had predicted zero growth.

Meanwhile, there is a correction in 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 the instrument decreased from 32.6K to 26.4K, and as for the balance, the advantage of the “bears” is decreasing every week: according to the report on positions with swap dealers, their balance is 37.135K versus 31.892K for the “bulls”. Last week, buyers increased the number of contracts by 1.158K, while sellers liquidated 5.545K positions.

As a result, the trading instrument decreased and retested the key support level for the long-term uptrend of 22.62, from which the quotes may rise to the resistance level of 23.49 and then to 24.50. If the support level of 22.62 is overcome, the long-term trend will reverse downwards, and short positions with the target at 22.06 are relevant.

The medium-term trend is downwards: last week, the price renewed the December low of 22.53 and has now retested it, failing to consolidate lower. If it is kept, an upward correction to the area of key trend resistance 24.42–24.24 will begin, and if it breaks through, target zone 2 (21.85–21.67) may be reached.

Support and resistance

Resistance levels: 23.50, 24.50.

Support levels: 22.62, 22.06, 20.95.

Trading tips

Long positions may be opened above 22.78 with the target at 23.50 and stop loss around 22.53. Implementation time: 9–12 days.

Short positions may be opened below 22.34 with the target at 21.50 and stop loss around 22.75.