The value of silver rises as the US Dollar experiences a significant correction before the Federal Reserve policy announcement.

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• Silver price strengthens as US Dollar corrects sharply ahead of the Fed policy.

The pair currently trades last at 23.418.

The previous day high was 23.42 while the previous day low was 23.1. The daily 38.2% Fib levels comes at 23.22, expected to provide support. Similarly, the daily 61.8% fib level is at 23.3, expected to provide support.

Silver price (XAG/USD) climbs to near $23.50 after delivering a breakout of the back-and-forth trades in the early New York session. Earlier, the white metal remained rangebound as investors sidelined ahead of the monetary policy by the Federal Reserve (Fed).

The S&P500 opens on a slightly bullish note ahead of the Fed monetary policy. The Fed is widely anticipated to keep interest rates unchanged at 5.25-5.50% as core inflation is consistently falling while the economy remains resilient.

Analysts at ANZ expect the FOMC will keep rates steady and maintain its tightening bias. There is evidence that both inflation and labor market pressures are easing, but considerable further progress is needed. We expect the FOMC will upwardly revise its 2023 and 2024 GDP forecasts. This could imply a slower speed of normalization in the Fed’s dual mandate, requiring rates to stay higher for longer.

The US Dollar Index (DXY) extends its correction below the crucial support of 105.00 as bets for neutral interest rate policy from the Fed deepen. Meanwhile, 10-year US Treasury yields dropped sharply to near 4.32%. A surprise discussion about rate cuts from Fed policymakers might shoot demand for US equities and weaken the appeal for the US Dollar.

Silver price climbs strongly above the 38.2% Fibonacci retracement (plotted from August 30 high around $25.00 to September 14 low at $22.30) around $23.34. The 20-period Exponential Moving Average (EMA) around $23.20 is providing a cushion to the Silver bulls.

The Relative Strength Index (RSI) (14) climbs above 60.00, which indicates that the bullish impulse has been triggered.

Technical Levels: Supports and Resistances

XAGUSD currently trading at 23.42 at the time of writing. Pair opened at 23.2 and is trading with a change of 0.95 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 23.63, 50 SMA 23.74, 100 SMA @ 23.7 and 200 SMA @ 23.48.

The previous day high was 23.42 while the previous day low was 23.1. The daily 38.2% Fib levels comes at 23.22, expected to provide support. Similarly, the daily 61.8% fib level is at 23.3, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 23.06, 22.92, 22.73
• Pivot resistance is noted at 23.38, 23.56, 23.71

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