The XAGUSD is up this afternoon after the surprise announcement by the Fed on a 50bps interest rate cut hit the newswires. Silver prices are trading higher at 1.1836 after the Federal Reserve interest rate action caused broad-based USD weakening. The FOMC’s Chief Jerome Powell is to feature in a news conference in 30 minutes. Markets are still trying to make sense of the emergency move, coming just two weeks before a scheduled meeting of the Fed.
Yesterday’s price activity caused the descending channel on the daily chart of XAGUSD to experience a breakdown, with silver price extending all the way to the 16.58888 support line (previous lows of 12 August and 2 December 2019.
After being beaten down yesterday by the risk-on sentiment that arose in expectation of the central bank’s move, silver prices on the XAGUSD charts have spiked this and are preparing to mount a challenge to the resistance level of 17.41483. However, a short-term resistance is at play at the current price level, and this must be overcome before 17.41483 can come into play. Beyond this level, further resistance levels lie at 17.79883, 18.14680 and 18.65367.
On the flip side, 17.18336 and 16.80484 continue to remain downside targets if the US Dollar starts to pick up or risk-sentiment returns to the market.