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Silver moved sideways on Friday, forming a doji day despite a stable dollar and rising yields. The greenback was able to gain traction as yields surged higher in the wake of the Fed’s commentary. The U.S. data was mixed. Despite softer than expected PMI and Jobless claim data released on Thursday, the Fed’s message that they will begin to taper bond purchases by the end of the year. The market is now pricing in a 25-basis point hike by September of 2022 and a 50% chance of a second hike by December 2022. Higher yields will help buoy the dollar, which should eventually weigh on the yellow metal.
Silver prices formed a doji day following an inside day which is a sign of indecision. Prices are poised to test resistance near the 10-day moving average at $22.91. Target support is seen near the September lows at 22.03. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The medium-term positive rate is decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation. The relative strength rebounded and then moved lower after testing the oversold trigger level of 30.
This article was originally posted on FX Empire