Key Highlights
- Silver price recovered well from the $16.00 swing low against the US Dollar and currently following an uptrend.
- There are two important bullish trend lines forming with supports at $17.70 and $17.40 on the 4-hours chart of XAG/USD.
- The Caixin China Services PMI in August 2017 posted a rise from 51.5 to 52.7.
- The US Factory orders figure of July 2017 will be released today, which is forecasted to decline by 3.2% (MoM).
Silver Price Technical Analysis
Silver price likely made a major bottom near $16.00 against the US Dollar. The price is currently gaining momentum and preparing for a break above $18.00.
Looking at the 4-hours chart of XAG/USD, there are two important bullish trend lines forming with supports at $17.70 and $17.40. On the upside, there is a connecting trend line with resistance at $18.10.
At the moment, the price is consolidating gains below $17.90. On the downside, an initial support is around the 23.6% Fib retracement level of the last wave from the $17.43 low to $17.93 high.
If the price corrects lower, it is likely to find bids near $17.70 or $17.60. The 100 SMA (H4) currently at $17.18 is moving higher and pointing a bullish bias in the near term.
Caixin China Services PMI
Today, the Caixin China Services PMI for August 2017 was published. The forecast was lined up for a minor increase in the PMI from the last reading of 51.5 to 51.8.
However, the actual result was above the forecast, as there was an increase to 52.7. Moreover, the Caixin China Composite Output Index was up from the last reading of 51.9 to 52.4. This is the strongest expansion activity seen for six months.
The report added that:
August data revealed that the latest expansion of overall business activity was underpinned by increased activity at both manufacturers and services providers. Notably, services companies registered the quickest upturn in business activity for three months.
To sum up, it seems like Silver price could break the recent high of $17.93 sooner or later and trade above $18.00.
The recent US Dollar weakness against the Euro, GBP and Aussie Dollar is also helping commodities such as Gold and Silver. If the current sentiment remains intact, there are chances of further upsides in Gold above $1340 and Silver above $18.00.
