Silver Price Forecast: Weak US payrolls fuel breakout above 50-day SMA
Silver (XAG/USD) jumps nearly 4% on Friday as buying accelerates following a decisive break above the 50-day Simple Moving Average (SMA) near $62. At the time of writing, the grey metal trades around $63.94 after briefly testing the $65 psychological mark.
The advance comes after disappointing US Nonfarm Payrolls (NFP) figures drag the US Dollar (USD) and Treasury yields lower. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.50, down nearly 0.45% on the day.
The US economy lost 23K jobs in July, even though experts had expected an increase of 80K. The job growth for June was also revised down to 20K from the previously reported 57K.
As a result, traders quickly trimmed bets on a September Fed rate hike, with the probability falling to around 42% from 67% a week ago, according to the CME FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as Silver.
Technical analysis: Daily chart
On the daily chart, XAG/USD holds a bullish near-term bias as price stands above the 21-day and 50-day Simple Moving Averages (SMAs). Momentum backs the constructive tone, with the Relative Strength Index (RSI) rising into the low-60s and the Moving Average Convergence Divergence (MACD) indicator extending further into positive territory with a firm bullish spread and expanding histogram.
On the topside, initial resistance is aligned at $65, ahead of the 100-day SMA barrier at $69. A sustained break above this cluster would open the way toward the higher horizontal resistance near $75.
On the downside, immediate support is found at the 50-day SMA at $62, followed by the psychological horizontal floor at $60. Below there, the 21-day SMA at $58 and the lower horizontal level at $55 form a deeper demand zone.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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