Silver Price Retreats As Upbeat NFP Data Lift US Dollar

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Silver price activity has turned bearish this afternoon as upbeat Non-Farm Payrolls (NFP) data lifted the US Dollar. In beating market expectations, employment change came in at 275K (versus 175K consensus and 225K previous) while the unemployment rate dropped to 3.5% (consensus of 3.6%). The Average Hourly earnings came in at 0.3%, in line with expectations. 

These numbers have allowed the US Dollar, under pressure all morning, to get some reprieve but not by much. Silver price as mirrored in the XAGUSD pair is now trading at 17.313, well off intraday highs of 17.570. However, XAGUSD price action is quite choppy, and reprieve may be temporary.

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Technical Outlook for Silver Price (XAGUSD)

Silver price is now on the verge of breaking below the rising wedge pattern on the 4-hour chart. However, there must be two successive daily candle closing penetrations below the lower wedge border to confirm the breakdown. 

The measured move from the wedge’s lower border is expected to end at the 16.798 price level (26 November and 4 December 2019 lows). However, a price move in this direction needs to take out the support at the 17.162 price level. 

On the flip side, 17.705 is the initial resistance target for any price recovery of the XAGUSD. This move would invalidate the wedge pattern and continue the risk-off market response to the coronavirus outbreak. 17.907 could come into play from continuing price surge if traders resume full-scale safe-haven buying. 

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