XAG/USD: THE "BULLS" STILL MAINTAIN AN ADVANTAGE IN THE PAIR, BUT THE TOTAL NUMBER OF TRADES THEY OPEN IS DECREASING

Current trend

During the Asian session, quotes of the XAG/USD pair are actively adding to their value, testing 27.65 for a breakout and updating local highs from April 26. Due to the lack of key macroeconomic statistics and closed European markets on the occasion of national holidays, the instrument is provided with moderate support by technical factors.

However, today market participants paid attention to statistics from China, which confirmed the gradual restoration of trading activity in the country. April Exports rose 1.5% year on year after correcting by -7.5% in the previous month and analysts had expected just 1.0%, while Imports accelerated 8.4% from -1.9% earlier, although investors expected only 5.4%. Against this background, the trade balance surplus increased from 58.55 billion dollars to 72.35 billion dollars, only slightly inferior to the preliminary market estimates of 76.70 billion dollars. Today at 14:30 (GMT 2) statistics on Initial Jobless Claims will be presented in the United States, where forecasts suggest an increase from 208.0 thousand to 210.0 thousand, while Continuing Jobless Claims may be recorded around 1.774 million. British investors at 13:00 (GMT 2) will focus on the outcome of the Bank of England's monetary policy meeting, paying particular attention to the rhetoric of officials who may provide some clarity regarding the possible timing of the launch of the interest rate reduction program, while experts do not expect any changes in current settings. Markets now assume an almost 100.0% probability of adjusting the indicator by 25 basis points before August 1 of this year, while the US Federal Reserve may decide to change the parameters only in September or even November, which will provide significant support to the American currency and beyond.

Meanwhile, the correction continues on the market. According to a report from the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in silver decreased from 59.3 thousand to 54.5 thousand. The "bulls" still maintain an advantage, but the total number of trades they open is decreasing, affecting the volatility of the instrument. According to the report on positions secured by real money, the balance of buyers is 55.603 thousand versus 21.843 thousand for sellers. Last week, the "bulls" reduced the number of contracts by 4.299 thousand, while sellers increased it by 1.896 thousand, confirming the fixation of part of positions.

Support and resistance

On the D1 chart, Bollinger Bands reverse into a horizontal plane. The price range is trying to consolidate, limiting the potential for the development of "bullish" sentiment in the ultra-short term. MACD is maintaining a relatively strong buy signal, being located above the signal line. Stochastic, having reached its highs, reversed into a horizontal plane, indicating overbought silver in the ultra-short term.

Resistance levels: 27.60, 28.00, 28.52, 28.80.

Support levels: 27.33, 27.00, 26.57, 26.19.

Trading tips

Long positions can be opened after a confident breakdown of the 27.60 level with a target of 28.52. Stop-loss — 27.00. Implementation time: 2-3 days.

A rebound from 27.60 as from resistance, followed by a breakdown of 27.33 may become a signal for opening of short positions with the target at 26.57. Stop-loss — 27.70.