Review and dynamics
In the middle of last week the pair XAG/USD rebounded from support level of 18.18 (ЕМА200 on 4-hour chart, ЕМА144 on the weekly chart). Since the beginning of today's European session the pair is at the resistance level of 18.30 (ЕМА50 on the daily chart).
The precious metals sharply fell last month amid overall strengthening in the USD in the foreign exchange market. The pair XAG/USD fell by 6% to $17.10 per troy ounce. This has been the strongest decline since January 2015. Up to date, since the highs at the level of 21.10 at the beginning of July, the price fell by 15%.
As long as the pair XAG/USD remains above support levels of 18.05 (ЕМА144 on the daily chart) and 17.70 (ЕМА200), uptrend will continue.
After the US presidential election market participants will focus on the meeting of the US Fed in December, as it is expected, that the Fed will increase interest rate at this meeting. If it happens it will be a strong negative factor for the prices of silver and the precious metals. However, the election results can give a surprise. Economist believe that in case of Trump’s victory, the demand for precious metals may increase dramatically.
However, after the US election volatility in the precious metals may soon decline.
Adherence to the monetary policy tightening by the US Fed may add pressure on the precious metals, including silver.
The indicators OsMA and Stochastic give mixed signals because of the strong effect of the presidential in the United States, when technical analysis ate losing its importance.
In case of breakdown of the levels of 17.70 (ЕМА200 on the monthly chart) and 13.65 (lows of January 2016) downtrend will continue.
If downtrend continues, next support levels will be 16.05 (ЕМА200 on the monthly chart) and 13.65 (lows of January 2016).
An alternative scenario can be possible of the US Fed prefers soft monetary policy, the USD will drop, the price of silver and precious metals will grow. After breakout of the resistance level of 18.95 (ЕМА200 on the weekly chart, ЕМА50 on the monthly chart) the pair will resume uptrend. After breakout of the resistance level of 21.10 the pair XAG/USD will continue to move in the ascending channel on the weekly chart with the upper limit above the level of 21.75 (Fibonacci 23.6% after the decline in the pair XAG/USD since May 2011 from the level of 47.90 to 13.65). Next target will be at the level of 24.00 (highs of mid-2013).
Support levels: 18.18, 18.05, 17.70, 17.25, 16.05 and 13.65.
Resistance levels: 18.30, 18.95, 19.15, 20.00, 20.60, 21.10 and 21.75.
Sell Stop: 18.16. Stop-Loss: 18.40. Take-Profit: 18.05, 17.70, 17.25, 16.05 and 13.65.
Buy Stop: 18.45. Stop-Loss: 18.18. Take-Profit: 18.95, 19.15, 20.00, 20.60, 21.10 and 21.75.
In the ascending channel
At resistance level of 18.30