Silver prices are bouncing higher this Wednesday ahead of the FOMC rate decision and press conference scheduled for this evening. The market expectation is for a dovish statement on Wednesday, which could be the energizing factor to give the XAGUSD the momentum for another push higher than $18.
The US Dollar continues to find itself under pressure on all fronts, dropping like a tank against the safe-haven assets: Swiss Franc, Gold, Japanese Yen. Silver prices on the XAGUSD are no different, as the pair has ticked up 1.28% on the day to trade at 17.7561 as at the time of writing.
Near-term, the FOMC statement and press conference will be the deciding factor for silver price movement on the XAGUSD pair. A hawkish statement will be good for the US Dollar, but this will be a market surprise if this happens. If that is the case, traders would need to look for a break of the ascending trendline floor that connects the lows of the candles of the last three trading weeks. This scenario opens the door for further downside action, targeting the 16.99205 support, formed by the 38.2% Fibonacci retracement from the recent swing low of 21 April 2020, to the last swing high of 1 June. Below this level, the support zone that lies between the 16.58888 price level (16 December 2019 and 9 March 2020 lows) and the 16.56950 50% Fibonacci retracement, forms the next target for downward trending price action. 16.14694 (61.8% Fibo retracement) and 15.80160 (14 April high and 15 May low) are the next targets in line if there is a significant price decline on the XAGUSD.
On the flip side, a dovish statement from the FOMC allows silver prices to aim to break above the current resistance at 17.76315. A successful breach f that area allows 18.14191 to become a new resistance target, with the 15 February high at 18.64935 making itself available as a further target if XAGUSD advances above the swing high of 1 June.