Silver Price Forecast: XAG/USD steady around $22.70 after a positive US ISM report
- After several losses held since January 21, the white metal rebound climbs 1.07%.
- A risk-on market mood weighs on the US dollar.
- XAG/USD remains downward biased, which could be cemented by a positive Friday Nonfarm Payrolls report.
Silver (XAG/USD) finally recovered after printing seven straight down days, approaching $23.00, as the North American session begins. At the time of writing, XAG/USD is trading at $22.74. In the meantime, US T-bond yields remain unchanged at 1.78%, while the USD slides 0.21%, sitting at 96.34.
The risk-on market mood keeps investors looking towards riskier assets. Meanwhile, the US dollar has been getting a beating since Monday. The greenback has lost 1.16% after piercing the 97.00 figure for the first time since July 8, 2021.
Fed speakers continue to drive US Dollar
Before Wall Street opened, the Philadelphia Fed President Harker crossed the wires. Harker commented that the Fed is not behind the curve, and he expects a rate hike of 25 basis points, four in the year. Concerning the balance sheet reduction, he said that the US central bank could begin the Quantitative Tightening (QT) once the Federal Funds Rates (FFR) hit 1% to 1.25%.
At 19:30 GMT, St. Louis Federal Reserve President James Bullard (voter 2022) would hit the wires.
Meanwhile, the US economic docket featured the US IHS Markit Manufacturing PMI which came at 55.5 higher than the 55.0 expected. Crossing the wires at press time, the ISM Manufacturing PMI for January came at 57.6, a tick higher than the 57.5 expected. Digging a little deeper on the ISM report, Manufacturing Prices crushed the expectations, rising to 76.1 from 68.1 estimated, while the ISM Manufacturing Employment increased to 54.1 from 53.9 in the previous month.
XAG/USD Price Forecast: Techincal outlook
The XAG/USD remains downward biased, despite the 1,30% jump in the day. The upward move fell short of the $23.00 figure, attributed to the release of US macroeconomic news. Nonetheless, the downward move was capped by a two-month-old upslope support trendline, drawn from December lows, around the $22.50-65 area.
In the event of extending the downtrend, the first support would be the aforementioned trendline, which once breached would expose the January 28, daily low at $22.15. A break below that level would expose the January 7 swing low at $21.94, followed by December 2021 swing low at $21.42.
Contrarily to the upside, XAG/USD first resistance is the 50-DMA at $22.88. If that level gives way for silver bulls, that could send prices towards the 100-DMA at $23.21, followed by the January 3 daily high at $23.40.
