Current trend

The XAG/USD pair continues the correction trend, trading at 31.60.

Silver quotes are rising following gold, which renewed its historical high yesterday after the start of the US Fed’s monetary easing cycle. The interest rate was cut by 25 basis points, putting pressure on all dollar assets and supporting the real assets in the long term. Against easing the debt burden, a recovery in production and an increase in demand for metals used in industry are expected. According to the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of a reduction in the cost of borrowing at the meeting on November 7 by 25 basis points is 92.1%. Thus, the influx of investors into the asset will continue, and the advantage of the XAG/USD pair is its rate lower than gold.

Yesterday, demand for silver contracts was 68.0K, below the peak volumes of 110.0K at the beginning of the month, and for option positions — 12.507K, above 11.312K earlier: a reduction in trading volumes may signal that traders are not confident in renewing the year’s highs.

As a result, in the case of fundamental support for the XAG/USD pair, the quotes may continue to grow.

Support and resistance

On the daily chart, the trading instrument is moving within an ascending channel with dynamic boundaries of 34.00–30.60, preparing to continue converging with the resistance line.

Technical indicators are holding the buy signal: the EMA fluctuation range on the Alligator indicator is directed upward, and the AO histogram is forming correction bars, rising in the buy zone.

Resistance levels: 32.30, 34.20.

Support levels: 30.90, 28.80.

Trading tips

Long positions may be opened after the price rises and consolidates above 32.30, with the target at 34.20. Stop loss — 31.70. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 30.90, with the target at 28.80. Stop loss — 31.50.