XAG/USD falls sharply to near $23.70 as US Dollar recovers – Crypto News – Crypto News
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XAG/USD bears have the upper hand below $19.00 mark XAG/USD bears have the upper hand below $19.00 mark

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XAG/USD falls sharply to near $23.70 as US Dollar recovers – Crypto News

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  • Silver price faces an intense sell-off amid recovery in the US Dollar.
  • The USD Index has rebounded as investors see market reaction to Fed rate cuts exaggerated.
  • Silver price drops sharply after a breakdown of Rising Channel chart pattern.

Silver price (XAG/USD) has extended its downside to near $23.70 as the US Dollar Index (DXY) has recovered further despite thin trading volume amid festive mood. The white metal has dropped to near two-week low as investors hope that recent sell-off in the USD Index due to deepening expectations of early rate cuts by the Federal Reserve (Fed) was a euphoric move.

The USD Index has rebounded to near 101.40 while the broader bias is still uncertain as investors seem firm about the decision of an interest rate cut from the Fed in March 2024. It is further expected that the Fed will continue reducing rates in May.

S&P500 futures have added moderate gains in the London session, portraying further improvement in the risk-appetite of the market participants. The 10-year US Treasury yields have recovery further to near 3.90% amid hopes that exaggerated market reaction to rate cut hopes has started fading now.

Going forward, investors will focus on the United States Manufacturing PMI from the Institute of Supply Management (ISM) and the Employment data of December. This will guide about the interest rate decision by the Fed in its January’s monetary policy meeting.

Silver technical analysis

Silver price witnessed a steep fall after a breakdown of the Rising Channel chart pattern formed on a two-hour scale. The white metal has refreshed its two-week low near $23.60. The 20-period Exponential Moving Average (EMA) around $24.00 is declining, which indicates more downside ahead.

The Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates that the downside momentum is intact.

Silver two-hour chart

 

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