Current trend

The XAG/USD pair shows a moderate decline, developing the "bearish" momentum formed the day before, as a result of which the instrument managed to retreat from the high at 32.50. Quotes are testing 30.40 for a breakdown, while trading participants are analyzing the likelihood of monetary easing by the world's leading central banks.

The day before, the minutes of the May meeting of the US Federal Reserve arrived on the market: as expected, members of the Federal Open Market Committee (FOMC) announced a significant slowdown in the rate of decline in inflation, which may require more time for the indicator to reach target levels of 2.0%. At the same time, some officials do not exclude the possibility of further tightening monetary policy parameters if necessary. In addition, investors paid attention to April inflation statistics from the UK, where the Consumer Price Index in annual terms slowed down from 3.2% to 2.3%, which was higher than expectations at 2.1%, and in monthly terms it went down from 0.6% to 0.3% with a forecast of 0.2%. At the same time, the Core CPI decreased from 4.2% to 3.9%, while analysts expected 3.6%. Against this backdrop, trading participants weakened expectations regarding the Bank of England's expected reduction in borrowing costs in June.

Today, investors will focus on US data on business activity in May and New Home Sales in April. Business activity is projected to remain unchanged at 50.0 points in the manufacturing sector and 51.3 points in the services sector, while New Home Sales are likely to decline from 0.693 million to 0.680 million.

According to the report from the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in silver increased to 59.5 thousand from 53.7 thousand. The "bulls" continue to increase their global advantage: according to the report on positions secured by real money, the balance of buyers is 61.325 thousand versus 19.704 thousand for sellers. Last week, the "bulls" opened 6.097 thousand contracts, while the "bears" reduced the number by 0.610 thousand, indicating the continued accumulation of global buy positions.

Support and resistance

Bollinger Bands on the daily chart show a steady increase. The price range is insignificantly narrowing, reflecting the emergence of "bearish" trend in the ultra-short term. MACD reversed downwards having formed a new sell signal (located below the signal line). Stochastic is showing similar dynamics, retreating from its highs and signaling in favor of the development of the downtrend in the near future.

Resistance levels: 30.50, 30.75, 31.13, 31.70.

Support levels: 30.15, 29.84, 29.35, 29.00.

Trading tips

Short positions may be opened after a breakdown of 30.15 with the target at 29.35. Stop-loss — 30.50. Implementation time: 1-2 days.

A rebound from 30.15 as from support followed by a breakout of 30.50 may become a signal for opening new long positions with the target at 31.13. Stop-loss — 30.15.