XAG/USD: In the downward channel on 11.06.2015

June 12, 2015

Current trend

The precious metals continue to decline in anticipation of the increase of the interest rates in the USA. Investors’ interest in the precious metals usually increases in the periods of instability in the market and weakening in the USD. Although yesterday at the closing session at COMEX the price of the precious metals slightly rose, due to strengthening in the Yen and volatility in the stock market, on Thursday the prices dropped again.

Attention today shall be paid to the US news, which will be released from 15:30 till 17:30 (GMT+3). If market expectations prove to be correct, positive data will help the rise in the USD.

Support and resistance

Silver had dropped in price compared to the USD for almost 1.5 times since July 2014. Since October 2014 silver is moving in the range of 15.30 (Fibonacci 0%) and 17.65 (Fibonacci 38.2%). The rise in the pair XAG/USD is limited by strong resistance level 16.75 (Fibonacci 23.6%), which coincides with ÅÌÀ144 and 17.10 (ÅÌÀ200 on the daily chart).

At the moment the pair is near the zero line of the upward correction channel (green line). However, short positions at the levels of 15.70, 15.30 seem more preferable.  

On the daily chart OsMA indicator is in the sell zone. Stochastic has reached the oversold zone. On the four-hour chart the pair is moving in the downward channel with the bottom limit at the level of 15.70. OsMA histogram is going down in the oversold zone, giving signals for short positions.

Support levels: 15.70, 15.30 and 15.00.

Resistance levels: 16.25, 16.50 and 16.75.

Trading tips

It is recommended to open short positions at the current price and from the levels of 16.75, 16.50 and 16.25 with the targets of 15.70 and 15.30. Long positions can be possible if the price breaks down the level of 16.80 with the targets of 17.10, 17.65.

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