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Commodities
March 21, 2021

XAG/USD statistical and technical analysis

Reading time:3 min

The current price of XAG/USD - Silver Spot US Dollar is 26.245 (March 19, 2021). This commodity traded sideways in the last week, after rebounding from an important level a week ago. Therefore, we will look at statistical and technical analyzes.

Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.3% and -1.37%, respectively. Friday´s return was 0.75%. Our scoring is currently positive (1) for the month-on-month change and 1 for price indexation. Both scorings range from -3 up to 3. Indexation is currently creating higher lows compared to early 2021 levels. The estimated cycles development based on our analytical systems is shown in the following chart.

Price indextaion and estimated cycles
Source: WALFIR

Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly, the green line the 6 months and the yellow line the annual moving average. XAG/USD is in bearish sentiment in the case of monthly MA, after falling below it. As we can see in the chart below, the 6 months (supported the market price twice a year) and annual MAs support bullish sentiment.

Daily price and periodical change
Source: WALFIR

Since the early 2020, there have been more downward trends that have not exceeded more than 3 consecutive days. Upward trends did not exceed more than 2 days in the same period. In the last days of the year, however, it reached its maximum (5 days) of 2020. We could use the average annual ATR (Average True Range) obtained from daily data (3.79%) to estimate Stop Loss orders for our positions. The current value is 2.49%. Approximately 90% confidence interval (return between -3% and 3%) is shown in the histogram below by a red rectangle. We could use the last decile of low to high returns (4.50%) to estimate Profit Targets, as shown in the second chart below.

Daily return distribution
Source: WALFIR
Daily low to high distribution
Source: WALFIR

Basic technical analysis points to neutral sentiment in the last week. The XAG/USD is currently very close to the demand zone (green rectangle), where the Fibonacci retracement level of 23.60% is. A psychological level of 25.00 may also be important. In addition, the shorter-term MA has also recently been very close to the spot price. It creates a kind of resistance. The divergence between price development and RSI motivated short-term bulls. However, they are currently having problems moving higher. Their sentiment may be supported by a longer-term MA, which is also in the demand zone.

Basic technical analysis
Source: TradingView

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forex
technical analysis
silver
Walfir Technologies
staff

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic systems. The core of the team (Lubos Snirc and Patrik Mackovych) is involved in the Investro project. Both have experiences in global financial and investment analytics and their articles and analyzes can be found on major financial news portals.

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