Silver Trapped Below 100-Day SMA as US NFP Approaches
Silver (XAG/USD) has been consolidating in recent days due to caution ahead of the US Nonfarm Payrolls (NFP) report. Traders are holding back from taking large positions as they await the release of the NFP figures, which could have a significant impact on the Federal Reserve's decision at its upcoming monetary policy meeting.
The 100-day Simple Moving Average (SMA) is currently acting as a key resistance level for XAG/USD, with the asset trading around $66.80 at the time of writing. The US economy is expected to add 56K jobs in August after shedding 23K in July, while the Unemployment Rate is forecast to hold at 4.1%.
The CME FedWatch Tool currently shows a 50% chance of a 25-basis-point rate hike, which could have implications for XAG/USD. A stronger-than-expected NFP result may keep the asset below the 100-day SMA, while a disappointing outcome could pave the way for a bullish breakout.
Technical analysis suggests that XAG/USD remains in a consolidation phase, with the Relative Strength Index (RSI) and Average Directional Index (ADX) indicating modest bullish momentum and a weak underlying trend respectively. The Moving Average Convergence Divergence (MACD) is marginally negative but showing signs of easing bearish pressure.