Silver prices are up this Monday, even as China steps up its containment activities to stop the spread of the coronavirus. Trading is limited on this day in observance of the Presidents’ Day in the US and Family Day in Canada.
The XAGUSD is presently trading at $17.80, which is slightly lower than intraday highs of $17.88. The intraday low was at $17.69. Intraday bullishness remains the prevailing short-term bias and could allow the target the upper border of the channel consolidation in which the metal has been trading for quite some time now.
The coronavirus outbreak remains at the heart of the trading bias for XAGUSD, and Bloomberg reports that the Chinese government has stepped up the quarantines by restricting the circulation of old banknotes so they can be sanitized.
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Technical Outlook for XAGUSD
XAGUSD retains an intraday bullish bias and is pushing towards the upper channel border, which is located at the 18.00 mark. The 17.80 price area has served as previous resistance (October 2019) and has also resisted price highs of last week. Therefore, XAGUSD must breach this area to the upside to make it to the upper channel border. A break of that area could potentially target 18.1468 (previous highs of late Oct/early Nov 2019 and early Jan 2020). The 24 Sept highs of 18.6536, as well as 19.2732, could become relevant resistance targets if prices can break above the 18.1468 resistance.
On the flip side, failure to breach the channel’s upper border keeps silver prices limited to the consolidation range, trading from the top end of this range to the floor of the consolidation area at 17.1823. However, the price must break below 17.7988 to reach the channel’s lower border. A breakdown of this border opens the door for silver prices to target the 16.8048 price level. The 9 Dec lows of 16.5888 could become relevant if selling momentum continues below the previous support.
The coronavirus-related headlines will continue to dominate headlines on this metal for the week.
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