Silver (XAGUSD) is little changed after President Trump’s speech delivered yesterday did not reveal any significant details on a possible US-China trade deal. Silver is trading at 16.92, slightly up on the day as it attempts a pullback to the broken 50% Fibonacci retracement level at 16.98.
U.S. President Donald Trump spoke at the Economic Club of New York. In a speech that was widely anticipated in the forex and commodity markets, Trump did not provide any new details on the state of US-China trade relations as pertains the anticipated Phase 1 deal. Rather, Trump once more ploughed into the Federal Reserve and bemoaned the fact that the cautionary rate cuts by the Fed had left the United States at higher interest rate levels than other developed economies.
The lack of details on US-China trade was initially interpreted as a muted negative signal, with silver closing the day 8 cents lower at 16.82. However, XAGUSD is now starting to stage an intraday recovery and may have to look to further fundamentals to make any more significant movements.
XAGUSD is staging a pullback after yesterday’s price action extended/confirmed the breakdown of the commodity below the immediate support of 16.98 (50% Fibonacci retracement level). The asset is therefore attempting a pullback to this price level, which is now acting as a resistance level.
A successful pullback above 16.98 would open the door for a retest of the blue line resistance at 17.61 (Nov 6/7 highs). This was a previous support and is expected to be a new resistance in role reversal.
Arrest of the pullback move at the 16.98 price level could open the door for further downside to the 18 July high/August 6 low at 16.35, which is the 61.8% Fibonacci retracement level.
Price movements on silver will be dominated by events that promote shift in risk sentiment.