XAG/USD: growth impulse getting weak
Yesterday, Atlanta Fed President Dennis Lockhart said a hike in US interest rates is seen as a start of a new period in US economic growth. US economy has a solid momentum going into 2016. He also noted the Fed might continue increasing rates not at every meeting but every other meeting. Therefore, the US Dollar tends to strengthen while the price of precious metals will remain under pressure.
However, due to geopolitical tensions and global financial markets instability, demand for the safe haven assets might increase.
Support and resistance
Despite OsMA and Stochastic on the 4-hour and daily charts recommend long positions, the growth impulse is getting weak.
The price reached the resistance levels of 14.20 (ЕМА144), 14.30 (ЕМА200 on the 4-hour chart). Theoretically speaking, an upward correction might reach the level of 14.45 (ЕМА50 on the daily chart).
The pair is trading in a descending channel on the daily chart with the lower border near the level of 13.50 and in a descending channel on the weekly chart with the lower border below the level of 13.20. After the breakdown of the level of 14.00 (August lows), the fall will accelerate.
Support levels: 14.00, 13.80, 13.65, 13.50.
Resistance levels: 14.45, 14.80, 15.05, 15.30.
Short positions can be opened from the level of 14.20 with targets at 14.00, 13.65, 13.50, 13.20 and stop-loss at 14.40.
Long positions can be opened from the level of 14.55 with targets at 14.75, 15.00 and stop-loss at 14.40.