Silver Price Forecast: XAG/USD consolidates slightly above $23 ahead of Fed policy

• Silver price fails to get a directional steer despite downbeat US private Employment data.
• The USD index witnesses a sell-off as expectations for rate-cut in March by the Fed have slightly improved.
• Focus remains on the Fed’s monetary policy.

Silver price (XAG/USD) trades sideways slightly above the $23.00 resistance in early New York session on Wednesday. The white metal fails to get a directional steer even though the United States Automatic Data Processing (ADP) has reported weaker-than-projected Employment data for January.

The US ADP has reported that 107K workers were hired by private employers against expectations of 145K and the prior reading of 158K. As per the CME Fedwatch tool, expectations for rate-cut in March have increased slightly above 50% after the release of the downbeat US Employment data.

The US Dollar Index (DXY) has witnessed an intense sell-off, dropped to near 103.20. 10-year US Treasury yields have dropped to near 4.02%.

Going forward, investors await the monetary policy decision by the Federal Reserve (Fed). The Fed is widely anticipated to keep interest rates unchanged in the range of 5.25-5.50% for the fourth straight time. Investors would focus on whether slowing demand for labor would impact the outlook on interest rates by Fed policymakers. Dovish signals for March monetary policy meeting would strengthen the appeal for the Silver price bulls.

Silver technical analysis

Silver price has strengthened after delivering a decisive break above the downward-sloping trendline plotted from December 3 high at $25.92. The white metal is expected to find immediate resistance near $23.53. The near-term appeal for the Silver price has turned bullish as it is sustaining above the 50-period Exponential Moving Average (EMA), which trades around $22.90.

The 14-period Relative Strength Index (RSI) has shifted into the bullish range of 60.00-80.00, which indicates that momentum has leaned towards bulls’ side.

Silver four-hour chart