14.35 USD -0.66%
  • NG
    2.27 USD 0.27%
    256.22 USD -1.15%
    70.04 USD -2.02%
  • XAG
    23.96 USD -0.14%
  • XAU
    2010.5 USD 0.48%
  • XCU
    3.73 USD -1.34%
  • XPD
    1478 USD -0.78%
  • XPT
    1048 USD 0.64%
  • ALU
    2243.47 USD -2.23%
  • RICE
    18 USD -1.75%
    74.17 USD -1.32%

XAG/USD statistical and technical analysis

A more hawkish tone in the FOMC press conference motivated short-term bulls in precious metals, mainly due to rising inflation. The current price of XAG/USD - Silver Spot US Dollar is 22.35 (December 19, 2021). So, let’s move on to statistical and technical analyzes.

Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.30% and -1.36% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.67% and -0.62% . Friday´s return was -0.50% , well below the first standard deviation. Our scoring is currently very positive (3 ) for the month-on-month change and 3 for price indexation. It means that we are in the early positive phase of the cycle. Both scorings range from -3 up to 3 . The development of the estimated cycles based on our analytical system is shown in the following chart.

XAG/USD daily price indexation Source: WALFIR

Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. According to all MAs, XAG/USD is in bearish sentiment because it is below them. In the event of a rebound, the monthly MA may be a resistance to the market price.

XAG/USD daily price development Source: WALFIR

Since our last analysis , there have been more declining trends, with a maximum of 4 consecutive days. The total maximum for the downtrend for the last 3 years is 8 days. Upward trends have not exceeded more than 2 consecutive days in recent months. The total maximum for the last 3 years is 5 days. We could use the average long-term ATR (Average True Range) obtained from daily data (2.71% ) to estimate Stop Loss orders for our positions. The current value is 2.18% , which is below average. Approximately 90% confidence interval (return between -3.00% and 3.00% ) is shown in the histogram below by a red rectangle.

XAG/USD daily return distribution Source: WALFIR

We could use the last decile of low to high returns (4.50% ) to estimate Profit Targets, as shown in the chart below.

XAG/USD daily low to high distribution Source: WALFIR

The basic technical analysis points to the short-term bearish development in recent weeks. Recently, however, there has been a rebound in the lower part of the demand zone (green rectangle), where is also the Fibonacci retracement level of 38.20% and the short-term moving average. In addition, the divergence between price development and the RSI could motivate bulls to take power. In the case of a further decline, additional support for the bulls could be the psychological level of 21.00 or the Fibonacci retracement level of 50.00% .

XAG/USD basic technical analysis Source: TradingView

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...


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