Current trend

The XAG/USD pair is showing slight growth, correcting after a moderate decline the day before, as a result of which the instrument retreated from its local highs from May 29: quotes are again testing 32.00 for a breakout, while traders are expecting new drivers of movement. The positive dynamics are supported by the rather weak positions of the American currency after the US Federal Reserve announced a 50-basis-point interest rate cut last week. Moreover, markets are confident that the indicator will also be reduced in the coming months, which will put additional pressure on the dollar.

Today, the US regulator's representatives, led by Jerome Powell, will speak. It is expected that the officials will present their vision of the future prospects for monetary policy and specify the size of the expected interest rate adjustments during the upcoming meetings in November and December. In addition, after the change in monetary parameters by the US Fed, the likelihood of further easing of monetary policy by the European Central Bank (ECB), the Bank of England, and a number of other global financial regulators increases significantly.

In addition, geopolitical risks are supporting the instrument: market participants are closely monitoring the escalation of the situation in the Middle East, where Israel is carrying out a series of attacks on Lebanon in order to neutralize the threat from the Hezbollah group. Meanwhile, new measures to support the national economy, announced by the Chinese government on Tuesday, which include stimulating lending to consumers and companies, as well as reducing the key short-term interest rate of the People's Bank of China, may contribute to an increase in consumption of precious metals by manufacturers.

The silver contract market continues to experience a correction: according to the latest report from the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions increased to 58.3 thousand from 44.7 thousand. Buyers are actively increasing their advantage: the balance of “bulls” in positions secured by real money is 53.201 thousand against 10.889 thousand for “bears”. Last week, buyers opened 12.507 thousand transactions, while sellers liquidated 2.715 thousand, indicating an increase in buyer activity.

Support and resistance

Bollinger Bands on the daily chart show confident growth: the price range is narrowing, reflecting the emergence of mixed trading dynamics in the ultra-short term. MACD is growing, maintaining a relatively strong buy signal (the histogram is located above the signal line). Stochastic shows similar dynamics, but the indicator line is quickly approaching its highs, indicating the risks of silver being overbought in the ultra-short term.

Resistance levels: 32.00, 32.28, 32.60, 33.00.

Support levels: 31.56, 31.15, 30.75, 30.50.

Trading tips

Long positions can be opened after a confident breakout of 32.28 with a target of 33.00. Stop-loss — 31.90. Implementation period: 2-3 days.

A return of the “bearish” dynamics with a subsequent breakdown of 31.56 may become a signal to open new short positions with a target of 30.75. Stop-loss — 32.00.