Silver shoots to test the $23.00s as markets adjust to a less hawkish Fed. (Pivot Orderbook analysis)

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• Silver shoots to test the $23.00s as markets adjust to a less hawkish Fed.
• A dovish 25BP rate hike sent the US Dollar and yields lower.

The pair currently trades last at 22.95.

The previous day high was 22.65 while the previous day low was 22.16. The daily 38.2% Fib levels comes at 22.34, expected to provide support. Similarly, the daily 61.8% fib level is at 22.46, expected to provide support.

The Silver price shot higher on Wednesday following the Federal Reserve´s dovish interest rate decision when the central bank announced its 25 bp rate hike. The decision was mostly expected while the Federal Open Market Committee Statement flagged “some additional policy firming” with the dot plot median pointing to one more hike.

Before today´s Federal Reserve event, markets were pricing in a year-end target rate of 4.36%. This has dropped in volatile reactions to the statement to 4.26%. At the time of writing, US 2-year Treasury yields are down to 4.77%, dropping from 4.259% on the day to print a low of 3.958%. Consequently, the US Dollar index, DXY, fell to a low of 102.065 from a high of 103.265 and the bird took off.

Meanwhile, Fed´s chairman Jerome Powell spoke to the press:

In summary, analysts at RBC Economics explained that ´´today’s move was in line with consensus and market pricing but much less of a foregone conclusion than typical Fed decisions.´´

the analysts explained that ´´two weeks ago the market was leaning toward a 50 bp hike with Chair Powell having opened the door to a larger move if the totality of incoming data warranted it. One week ago there were doubts that the Fed would raise rates at all amid turmoil in the banking sector. The market finally coalesced around a 25 bp increase, though there were some odds and several calls for the Fed to take a pass.´´

The analysts expected a hike but wouldn’t have argued with the Fed waiting six weeks until its next meeting to better assess the impact of recent events and any further risks to the banking sector. ´´Today’s dovish tone and guidance, at least, suggests policymakers are now more mindful of the risks of over-tightening. And if today’s hike isn’t the last, we’re getting very close to the terminal,´´ the analysts concluded.

Meanwhile, with respect to Silver prices, analysts at TD Securities said, ´´ CTA trend followers are relatively under positioned in silver markets, where a break above $24.00/oz would spark large-scale buying activity.´´

Technical Levels: Supports and Resistances

XAUUSD currently trading at 22.95 at the time of writing. Pair opened at 22.4 and is trading with a change of 2.46 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 21.23, 50 SMA 22.29, 100 SMA @ 22.38 and 200 SMA @ 20.96.

The previous day high was 22.65 while the previous day low was 22.16. The daily 38.2% Fib levels comes at 22.34, expected to provide support. Similarly, the daily 61.8% fib level is at 22.46, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 22.15, 21.91, 21.66
• Pivot resistance is noted at 22.64, 22.89, 23.14

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