The Silver Spots (XAGUSD) reached a four-week high on the Wednesday trading session after a spectacular gain of 4.37% as the US inflation data cooled off faster than the market’s expectation.
The US inflation rate and the core inflation rate for June slowed to 3% and 4.8% year-on-year. The figures missed the market’s expectations of 3.1% and 5%, respectively, raising bets that the current monetary policy tightening by the Fed could be coming to an end, weighing on the US dollar and boosting the dollar-denominated commodity.
Limited supply from regulatory changes in Mexico and a decline in production in Peru are also boosting the spot price in a week where the spot has gained over 5%. Strong industrial demand, particularly from the solar panel sector, is expected to support silver prices despite pressure from the Fed’s hawkish stance.
The 4H chart shows that the price action has been under firm bullish pressure, which has helped the price action sustain a break above an ascending channel trading pattern. Therefore, a sustained push above the weekly high of $24.245/ounce would leave the $24.346/ounce price level to provide a short-term trading opportunity as the price action moves towards the $24.635/ounce resistance level.
However, a push below the 23.60% Fibonacci retracement level would bring the $23.605/ounce and $23.229/ounce support levels firmly into play, with the 50-SMA (blue line) and the golden ratio likely to provide significant support to the price action.
The price action has firmly established a major resistance level at $25.078/ounce (green line) and a major support level at $22.108/ounce (red line).
The spit price has been under firm bullish pressure, and a push above the session high could suggest the continuation of the current bullish sentiment, leaving the $24.245/ounce and $24.245/ounce as likely levels of significance for the bulls in the near term.
Sources: TradingView, Trading Economics, Dow Jones Newswire, Reuters.
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