By ForexTime
The precious metal could see heightened levels of volatility this week due to key US economic data and speeches by Fed officials that could offer clues on the outlook for rates. It will be wise to keep a close tab on the US January PCE report on Thursday, especially the Core Personal Consumption – the Fed’s preferred inflation gauge.
Silver often follows gold’s lead, with interest rate expectations influencing appetite for non-yielding assets like precious metals.
To put things into perspective, silver and gold have moved in tandem 68% of the time, in any given 30-day period over the past decade! Essentially, traders who have been closely following gold can expect similar price action on silver.
But after opening the week with a downward gap, the question is whether the precious metal can close the gap?
Free Reports:
At the time of writing, silver is fulfilling the measured move objective of an inverse head and shoulder pattern on the H1 timeframe.
After the completion of the “Inverse Head and Shoulders Pattern“, silver bulls (those looking to see the precious metal rally) will have their attention turned to the $22.72 level which is the golden 161.8 Fibonacci ratio, to act as near-term resistance.
On the other hand, XAGUSD bears (those looking to see the precious metal decline) may look for a close below the 100 Fibonacci level at $22.614 with a retest and breach of the neckline of the inverse head and shoulder patterns neckline at $22.565 as a possible sign of a decline to lows below $22.437.
The Fibonacci levels are taken from the February 26th intraday high of $22.614 to February 26th intraday low of $22.437.
According to Bloomberg’s FX forecast model, there’s a 73% chance that XAGUSD will trade within the $22.0165 – $23.3762 range over the next one week.
ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com
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