Silver Price Prediction – Prices Flare Up Due To The Weak Dollar


Silver prices erupted on Tuesday, closing above trendline resistance. The dollar fell but settled well after the session lows, rebounding during the North American trading session. US yields have been mixed, with the 10-year rate increasing while the 2-year rate retreating. According to the Mortgage Brokers Association, higher yields have led to higher mortgage rates, which could reduce term refinancing.

Technical analysis

Silver prices broke out, closing above trendline resistance created from a descending sloping trendline approaching $ 23.36. Further support is seen near the 50 day moving average at 23.27. Target resistance is seen near September highs at 24.82. Medium term momentum turned positive as the MACD (Moving Average Convergence Divergence) index generated a cross buy signal. This happens when the MACD line (the 12 day moving average minus the 26 day moving average) crosses above the MACD signal line (the 9 day moving average of the MACD line). The MACD histogram prints in positive territory with an upward sloping path that indicates higher prices.

Rising mortgage rates

Higher Treasury yields result in higher mortgage rates. A forecast released by the Mortgage Bankers Association projects that the average 30-year fixed mortgage rate will reach 4% by the end of 2022, up from around 3% currently. This will translate into a 62% drop in refinancing fixtures to just $ 860 billion. This accentuates the forecast decline of 14% in 2021 to $ 2.26 trillion.

This article originally appeared on FX Empire

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