Xagusd Challenges A Major Sma

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Xagusd Challenges A Major Sma

XAG/USD Challenges 200 SMA Near $23.20 Level

After a weak USD, the XAG/USD (Silver) trading pair rose to $23.20, where the 200 SMA is located on the daily chart. Now, the focus has shifted towards the Jackson Hole Symposium which is due on Thursday and will likely attract some major volatility in the FX & bonds market.

For now, the US yields are on the rise, which is likely a move toward safety. However, this behavior of the markets is also limiting the silver gains if we look at the last week's price action.

At Jackson Hole, the Fed chair will share his views and thus is regarded as a high-intensity event. Experts believe that his comments will inject fresh liquidity into the bonds market and the USD-denominated pairs. For now, the inflation numbers are showing a mixed picture, while the US economy is showing signs of resilience.

60% Chance Of Rate Hike

If we look at the FedWatch Tool, there's a 60% chance of no rate hike during September. On the other hand, the odds of a rate hike at 40% which would add 25 bps to the interest rate. However, we believe that these odds will change significantly once the Fed chair delivers his speech.

Looking at Silver's daily chair tells us that a neutral-to-bullish outlook is a major theme. In the short term, the silver bulls appear to have the upper hand but it is not sustainable.

In addition, the RSI is also rising below the midline which is a sign of bullish momentum build-up. And if we look at the MACD, it also suggests that the Silver sellers are now exhausted. But given the next week's economic events, it would be too soon to rely solely on the lines and values printed by a technical indicator.

After all, none of these indicators can account for the Jackson Hole Symposium. So the wise thing to do is to wait and see how the Silver reacts to the next week's economic docket.

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