XAG/USD: moderate growth

Current trend

Silver is showing moderate gains during today's Asian trading session, trading near the local highs of last Thursday. The instrument strengthened by more than 1%, responding positively to the further weakening of USD, which is awaiting the results of the Fed meeting on Wednesday. It is predicted that the regulator will not change the parameters of monetary policy; however, it might maintain its soft rhetoric regarding its future prospects. In addition, investors are looking forward to hearing plans for additional bailouts, given that US lawmakers have so far failed to agree on a new bailout package.

The instrument is additionally supported by the expectations of the minutes of the Bank of Japan and the Bank of England meetings, which will take place on September 17.

Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range has been changing only slightly for a long time, indicating approximate balance of power in the short term. MACD has reversed to growth having formed a new buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought instrument in the ultra-short term.

Current showings of the indicators do not contradict the further development of the uptrend in the short term.

Resistance levels: 27.50, 28.00, 28.87.

Support levels: 27.14, 26.27, 25.71, 24.92.

Trading tips

To open long positions, one can rely on the breakout of 27.50. Take-profit – 28.50–28.87. Stop-loss – 26.90.

A rebound from 27.50 as from resistance followed by a breakdown of 27.14 may become a signal for new sales with the target at 26.27. Stop-loss – 27.70.

Implementation time: 2-3 days.