Silver Price Forecast: XAGUSD marches firmly above $18.50 amidst a mixed mood

• XAGUSD marches firmly, gaining almost 0.50% on Monday.
• Market players’ sentiment shifted negatively on Apple’s news that would slow hiring, reigniting recession fears.
• Silver Price Forecast (XAGUSD): In the near term is neutral-to-upward biased and might test $19.00.

Silver (XAGUSD) barely recovers some ground but remains trading below the $19.00 mark on Monday, amidst a trading session characterized by a mixed sentiment, which turned sour, despite some solid US corporate earnings, though of late, news of the giant Apple saying that it plans to slow hiring, turned things upside down, reigniting investors recession fears.

XAGUSD is trading at $18.73, after opening near $18.60s, the lows of the day, and edged up, hitting a daily high at $19.01, before retracing below the 100-hour EMA at $18.79, which once broke, would exacerbate a move towards the daily pivot point at $18.55.

Silver remains steady, despite mood shifting mixed

Sentiment shifted from positive to negative. Silver traders should notice that Apple news regarding employment keeps recession worries lingering in investors’ minds and further reinforces the previously mentioned, is the inversion of the US 2s-10s yield curve for the tenth straight day at -0.201%. All that said, it might deter Fed policymakers from moving above the 75 bps rate hike, which could keep US Treasury yields lower, a tailwind for XAGUSD’s prices.

Last week’s data, led by US inflation at higher levels, namely consumer and producer price indices, was higher than expected and hit fresh multi-decade highs. Nevertheless, core CPI stood below the 6% threshold, falling for the third consecutive month, portraying a better-than-expected outlook for inflation. Further strengthening the case is UoM Consumer Sentiment inflation expectations, which descended from 3.1% to 2.8% in 5 years. That said, Fed officials, which entered the blackout period on Saturday, were vocal in supporting a 75 bps hike in July, except for Atlanta’s Fed President Bostic, which said: “everything is on the table” after a dismal CPI report.

In the meantime, the US Dollar Index, a gauge for the greenback’s value vs. its peers, slides 0.58%, sitting at 107.360, faltering to follow suit the US 10-year benchmark note, which is rising four basis points, yielding 2.965%, at the time of typing.

What to watch

The week ahead will reveal critical economic data in the Euro area. Eurostat will report inflation for the bloc on Tuesday,  and the ECB will deliver its monetary policy decision. The ECB is expected to raise rates for the first time in 11 years.

On the US front, the calendar will be packed with Housing Starts, Building Permits, Existing Home Sales, Initial Jobless Claims, and July’s S&P Global PMIs.

Silver Price Forecast (XAGUSD): Technical outlook

From the daily chart perspective, XAGUSD is still downward biased, though the Relative Strength Index (RSI) at 31.00, just exited from oversold conditions, might open the door for a test of $19.40. However, silver traders would first need to reclaim $19.00 if they aim to increase prices.

XAGUSD, in the short term, is neutral-to-upward biased, capped by the 200-hour EMA at $18.99 and the 20-hour EMA at $18.85. However, on the flip side, the 100 and 50-hour EMAs, each at $18.79 and $18.62, respectively, are seen as solid buying levels, putting a lid on selling pressure.

If the XAGUSD heads downwards, the first support would be the 50-hour EMA at 18.62. Break below will expose the daily pivot at 18.55, followed by the S1 daily pivot point at 18.33. On the flip side, XAGUSD’s first resistance would be the confluence of the 20 and 200-hour EMAs around $18.85-99. A breach of the latter would expose the R2 daily pivot at $19.14, followed by July 13 high at $19.40.