XAGUSD, H4 and Daily
By Andria Pichidi – November 12, 2018
Recent US data, such as last Friday’s hot PPI numbers, and the Fed’s policy guidance following last week’s FOMC meeting, have fanned expectations for a resumption in Fed tightening at December’s policy meeting, which has underpinned the US currency. The USDIndex has gained 0.5% in posting a 17-month high of 97.38, while EURUSD has concurrently printed a 16-month low of 1.1268 and USDJPY a 6-week high at 114.20.
This drags to week lows, with Silver futures near $14.10, on USDIndex strength, despite the risk-off theme. The Chinese economy, which is slowing faster than expected amid growing risk that the country will have to backstop its economy with further measures to slow the outgoing tide, risking increased debt to do so, has underpinned as well.
On Friday, the XAGUSD confirmed a close below the set since June and the up-channel formed since end of September. This decisive move below the 2-month Support at around $14.20-14.22 area, and as the pair remains below this barrier so far today, assured the switch from neutral to negative outlook.
According to the momentum indicators, the market could maintain negative momentum in the short-term as the flattened below 30, while the oscillator posted a crossover with its signal line in the 4-hour chart. Meanwhile, the MAs formed a cross, with both 20-and 50-period MA crossing below 200-period MA. In the , XAGUSD’s picture is neutral to negative as sloped below neutral, whilst turned negative with signal line consolidating around neutral zone.
As the asset confirmed a leg below $14.20 on Friday, the market could retest the next hurdle at the round $14.00 level, but more precisely September’s low at $13.93. In the wake of more negative momentum, the next level in focus could be at the 2-year low of $13.73. To the upside immediate Resistance holds at $14.22, and the medium term at 20-day at $14.50.
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