- Silver price falls below $30 as the US dollar recovers amid caution ahead of US NFP data release.
- Market speculations about the Fed cutting interest rates in September are improving.
- Silver price weakens after Double Top crash.
The price of silver (XAG/USD) falls below the psychological support at $30.00 in Tuesday’s European session. The white metal is weakening as the US dollar (DXY) rebounds amid uncertainty ahead of the release of US non-farm payrolls (NFP) data for May, which will provide clues as to whether the Federal Reserve (Fed) will begin to cut key lending rates from current September levels meeting.
The US Dollar Index (DXY) rebounded after falling to a multi-week low near 104.00. The attractiveness of dollar-denominated commodities such as silver is waning as a higher US dollar makes them more exorbitant.
Speculation about the Fed cutting interest rates in September has now intensified as the latest US economic data show signs of slowing US economic growth.
The U.S. ISM manufacturing PMI showed factory activity fell for a second straight month, the demand outlook was bleak and input prices rose at a slower pace. Recently, US gross domestic product (GDP) for the first quarter was also revised down to 1.3% from the initial estimate of 1.6%.
At today’s session, investors will get acquainted with JOLTS data on job vacancies for April, which will be published at 14:00 GMT. U.S. employers are estimated to have added 8.34 million jobs, down from the previous reading of 8.49 million.
Silver technical analysis
Silver price is weakening after breaking the Double Top chart formation formed on the four-hour time frame. The chart pattern reached a multi-year high at $32.50 and was triggered after breaking below the May 24 low near $30.00. A breakdown in the above chart pattern indicates a bearish reversal.
The asset has moved below the 50-period exponential moving average (EMA) near $30.80, indicating that the short-term trend has turned bearish.
The 14-period Relative Strength Index (RSI) has moved to a bearish range of 20.00-40.00, suggesting that momentum has tilted towards the downside.
