The recent macroeconomic statistics coming out in the US increasing market expectations of an interest rate hike by the Fed in December. Revised GDP data for the third quarter showed a 2.1% growth, which is 0.1% higher than forecasts. In addition, Durable Goods Orders for October grew by 3% that was two times bigger than economists expected, Personal Consumption Expenditures – Price Index increased, while Initial Jobless Claims fell.
Fed Funds futures indicate the interest rate hike possibility in December currently stands at 78%, and the Dollar index rose to its 13-year highs.
Thus, in the near future the XAG/USD pair will remain under pressure.
Support and resistance
The pair is trading between the levels of 14.50 (August lows) and 14.00 (June lows) and is likely to stabilise near the level of 14.20.
A breakdown of the level of 14.00 (year lows) will accelerate the fall. At the same time, an upward correction might last up to 14.70 (Ð•ÐœÐ144 and upper border of a descending channel on the 4-hour chart).
On the 4-hour and daily charts, OsMA and Stochastic remain in the neutral zone indicating a flat in the pair.
Support levels: 14.00, 13.50.
Resistance levels: 14.35, 14.50, 14.60, 14.70, 14.90, 15.30.
Long positions can be opened above the level of 14.29 with targets at 14.42, 14.60 and stop-loss at 14.20.
Short positions can be opened below the level of 14.14 with the target at 13.95 and stop-loss at 14.25.