Silver Price Forecast: False breakout and hawkish Fed sinks XAG

Silver price makes a U-turn after reaching a two-month high of $71.12, then dives below the $69.00 figure as Fed Chair Kevin Warsh leaned hawkish in his Jackson Hole speech, pushing US Treasury yields higher. Consequently, the white metal edged lower, as XAG/USD trades at $66.76, down 3.60%.

XAG/USD Price Forecast: Technical Outlook

From a price action standpoint, Silver's false breakout above the $70.00 level could open the door to a deeper-than-expected pullback, even though XAG is short-term upward biased.

 Momentum, as depicted in the Relative Strength Index (RSI), favours further upside as buyers are in control. However, over the last two days, the RSI dipped, indicating that bulls are not out of the woods.

For a bullish resumption, Silver must clear $70.00. A breach of the latter will expose the high of the day (HOD) at $71.12, followed by the $72.00 milestone. Above sits the 200-day SMA at $72.48.

On the other hand, the path of least resistance in the near-term is a break below $66.00, which could prompt a test of the $65.00 mark, followed by the 50-day SMA at $61.44. Once hurdled, the $60.00 psychological level is below.

XAG/USD Price Chart – Daily