Silver (XAG/USD) surges to five-day highs above $66.00 on Thursday as traders digest the Federal Reserve (Fed) rate hike on Wednesday. Meanwhile, a drop in US Treasury yields is undermining the Greenback, which clings to early gains but has barely changed. At the time of writing, XAG/USD trades at $65.41, up over 3.90%.
XAG/USD Price Forecast: Technical outlook
Even though the ‘head-and-shoulders’ chart pattern remains in play, a potential breakout of the neckline can negate the bearish formation. The Relative Strength Index (RSI) shows bullish momentum is building, with the RSI clearing its 50-neutral level and trending higher.
With that said, the first resistance for XAG/USD is the 100-day Simple Moving Average (SMA) at $66.56. A breach of the latter will expose the $67.00 mark as the white metal embarks on a journey to reclaim $70.00. Above these levels sits the 200-day SMA at $73.16.
On the other hand, if Silver dives below the ‘head and shoulders’ neckline, it can clear the way for a potential resumption of the downtrend. The first line of defense is the 50-day SMA at $62.86, ahead of the March 23 swing low at $61.01, ahead of the $60.00 mark. Below the next support is the ‘head-and-shoulders’ measured objective near $55.00.
XAG/USD Price Chart – Daily
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