Mar 26, 2020, 9:21:19 AM

XAG/USD: metals prepare for the next collapse

Current trend

The price of silver throughout the week restores lost positions and is currently at 14.40. The USD Index shows a moderate decline, which contributes to the recovery of safe haven assets; however, the number of speculative positions in the metal continues to decline. This time, according to the Commodity Futures Trading Commission, the number of positions was 42.0K instead of 48.3K a week earlier. This is one of the lowest rates in the last 2 years, indicating that investors simply ran out of cash liquidity.

The focus of investors is the decision made in the US Congress on the adoption of a large-scale package of measures to support the economy in the amount of USD 2T. Money will come to the markets before the end of this week, which will create tremendous volatility. Given that the precious metals market sagged significantly last week after such injections of cash liquidity, this time the situation could be repeated.

Support and resistance

After a significant decline last week, the asset is correcting upwards and again trying to reach an important level of 15.00. The Alligator indicator is in a state of purchase; however, fast EMAs begin to reverse. The histogram of the AO oscillator is globally in the buy zone; however, it forms a local signal to decrease.

Resistance levels: 15.40, 17.50.

Support levels: 13.30, 11.40.

Trading tips

If the asset continues corrective growth and the price consolidates above the resistance line at 15.40, buy positions will be relevant with target at 17.50. Stop-loss – 14.00.

If the asset declines globally, and the price consolidates below the local support line at 13.30, short positions can be opened with the target at 11.40 and stop-loss at 14.00.

Implementation time: 5 days and more.

Scenario

  • Timeframe

    Weekly

  • Recommendation

    BUY STOP

  • Entry Point

    15.40

  • Take Profit

    17.50

  • Stop Loss

    14.00

  • Key Levels

    11.40, 13.30, 15.40, 17.50

Alternative scenario

  • Timeframe

    Weekly

  • Recommendation

    SELL STOP

  • Entry Point

    13.30

  • Take Profit

    11.40

  • Stop Loss

    14.00

  • Key Levels

    11.40, 13.30, 15.40, 17.50

Tifia trading account

Open

Silver analysis for today.