USD and all USD related instruments froze ahead of the first big speech from Jerome Powell – new FED Chairman. We do not have much time left before this event, so let us go straight to the point – estimating the direction for the Silver.
Why we chose Silver, not Dollar index, EUR/USD or Cable? It is because of the fact that on the XAG/USD we are at the end of the sideways trend which should soon result with directional movement and a proper trading signal. So far, chart give us a slightly bigger bearish outlook. It is caused by the false breakout pattern (green rectangle) above the long-term down trendline and the resistance on the 17.4 USD/oz (blue). In addition to that, price broke the support on the 16.9 USD/oz, which was later confirmed as a closest resistance. As we can see, price action signals are pretty negative.
On the other side of the board we do have two bullish factors. First one is the price being above the 15.7 USD/oz (orange) and above the mid-term up trendline (black). Indeed, a typical sideways trend. There is one additional bullish factor though – Gold. Older and bigger brother is still having a bullish situation on the chart, which can directly support the sentiment here.
That being said, let's estimate how the current situation is connected with the speech from Mr Powell. Breakout of the mid-term up trendline (black), should trigger us a sell signal with the target on the orange area. Come back above the red horizontal resistance should give us a buy signal aiming the red down trendline connecting lower lows since the November 2016.
