China’s upbeat Caixin Manufacturing PMI data for May 2020 is helping to boost silver prices this morning, as the XAGUSD chart shows a 2.2% gain to enable the pair continue its surge well beyond the $18 mark.
According to data released by Markit, the Caixin Manufacturing Index came in at 50.7, versus a consensus of 49.7 and the previous figure of 49.4. This report indicates an improvement in the manufacturing sector as China relaxes the coronavirus-related lockdowns and factories start to reopen. However, it may take some time for full restoration of factory activity as demand for manufactured goods continues to remain low. Silver continues to see a surge in demand as the industrial metal is getting bids as manufacturing picks up across the world.
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Technical Outlook for XAGUSD
Silver price on the XAGUSD pair has picked up from where it left off last week, as it registers its 5th straight day of gains. The XAGUSD pair is now challenging the 18.14191 resistance, which is where the double tops of 28 October and 4 November are formed and where we have a cluster of highs between 13 January and 4 February 2020.
If silver price is able to break this level, this would open the door towards 18.76827 (previous highs of 24 September 2019, 8 January 2020 and 24 February 2020.
On the flip side, inability to break 18.14191 could lead to a pullback which retests the 17.50813 price support, with the 200-day moving average and the 16.58888 price levels coming closely behind as additional pivots.
Silver price chart (daily)