Silver prices have edged upwards from intraday lows this Friday afternoon after US President Trump walked back on a story attributed to the Wall Street Journal (WSJ) concerning the much anticipated US-China trade deal.
Recall that in yesterday’s piece concerning this story, the WSJ had indicated that the US had agreed on a 50% tariff reduction on $360billion worth of Chinese imports and also cancelled the planned December 15 tariffs. President Trump has come out today to call the story “fake news”.
“The Wall Street Journal story on the China Deal is completely wrong, especially their statement on tariffs… Fake News. They should find a better leaker,” he tweeted.
This renewed cloud of doubt that has been cast on the US-China trade deal by President Trump may have curbed risky sentiment in the market, with the price of XAGUSD rising from intraday lows of 16.84 to trade around 16.90 on the news.
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Technical Outlook for XAGUSD
Silver price action in the last few weeks is contained within a falling wedge formation, with this week’s price bounce from 15.5888 making a push towards the opposing wedge border. The rising wedge is a pattern which pulls down price in a consolidated retracement from an uptrend, and is expected to resolve with a price continuation of the initial uptrend.
We can see on the daily chart that the initial trend is up, with a retracement of price within the wedge pattern. If the price breaks above the wedge’s upper border in line with technical expectations, then the door is blown open for price to aim for the upside target at 18.65367 This price level completes the measured move from the breakout point, but there are pitstops along the way at the 17.27256 (Aug 15 and Dec 4 highs) and 18.10539 (Sept 17 and Oct 28).
On the flip side, signing of the US-China Phase 1 deal could be bearish for silver prices as per risk-off sentiment, with a possibility of a break of 15.5888, which negates the wedge pattern and targets the July 22 and Aug 5 previous lows at 16.15726.