Silver bulls seeking further weakness in USD on key week ahead
- XAG/USD bulls seeking a break of hourly and then daily resistance.
- The US dollar will be a major focus in key US data this week.
Silver is holding steady in holiday thin markets for the open after it took a blow on Friday and ended the day lower by 0.65%.
New York traders started to pile into the US dollar on upbeat data and due to month-end. XAG/USD fell from a high of $26.19 and some change to a low near $25.80.
However, the bears will be looking for further dollar weakness for the time to come.
The greenback will be sensitive to the economic data coming through after the Fed's policy meeting on Wednesday where Fed’s Chair Jerome Powell said there was not enough evidence of "substantial further progress" toward recovery to warrant a change to its ultra-loose monetary settings.
We saw a 4.2% rebound in US consumer spending for March amid a 21.1% surge in income which resulted in a 0.4% rise in the core personal consumption expenditures (PCE) index.
This data was compared with a gain of 0.3% the previous month and as a result of the additional COVID-19 relief money from the government.
Also, the Chicago Purchasing Management Index (PMI) showed a reading for April of 72.1, the highest in almost four decades.
The week ahead includes US jobs data and the Consumer Price Index.
Considering the Fed's lower for longer, the US dollar would be expected to only react to extraordinary deviation from market expectations with respect to CPI.
However, a firm jobs number will be beneficial to the greenback.
Silver technical analysis
Meanwhile, silver is pressed against hourly resistance from a modest correction from the lows on Friday.
However, the daily resistance just below 26.00 was formed following a break of prior support on Thursday and failures at the area on a retest, the bears will be fully back in control for a break of recent lows at 25.71.