Key Points
- US Jobless Claims have acted as the catalyst for Thursday’s rally on Wall Street.
- Friday features a vacant economic calendar.
- Silver remains in a daily downtrend, with resistance present at just over 28.1000.
Market Overview
Throughout 2024, silver (XAG/USD) has been a great bet for precious metals bulls. Prices are up big and remain in an intermediate-term bullish trend. However, the past several days have been a challenge. Amid the global equities market chaos, traders have made an about-face towards silver. What’s next?
Jobless Claims
It’s been a quiet week on the economic calendar, yet a chaotic one for asset values. Thursday’s pre-Wall Street open featured the weekly jobless claims numbers.
Generally, Initial and Continuing Jobless Claims aren’t big market movers. Aside from the COVID-19 era, when investors hung on every word from the unemployment roles, these events are best considered peripheral.
This week’s numbers are an exception. Following last Friday’s dismal US Non-Farm Payrolls (NFP) report, the markets were hungry for American jobs data. The numbers came in split, with Continuing Jobless Claims rising and Initial Jobless Claims falling. Initial Jobless Claims are viewed as being more important; this figure came in at 233,000, down from last week’s 250,000 and beneath expectations of 241,000.
With rate cuts assured for September, today’s Initial Jobless Claims suggest that recession may not be a foregone conclusion. If nothing else, it was a bit of welcome news to risk assets. For silver, the weekly jobs numbers have brought out the bulls, prompting a rally of 2.56%.
XAG/USD: Technical Outlook
On the daily timeframe, the trend is down for the XAG/USD. Mid-July highs north of 31.0000 are long gone. Now, this market is attempting to establish a firm bottom near 26.5000.
For Elliott Wave practitioners, the past three weeks have been a case study in a trending market. Basic Elliot Wave tells us that counts 1, 3, and 5 are directional moves; counts 2 and 4 are retracements.
On the daily chart, it appears that a 4 count is developing. Given this analysis, selling Fibonacci pullbacks with the broader trend is a viable strategy. The 62% Fibonacci retracement (28.1751) is a prime area to short the XAG/USD. Conversely, a rally toward 30.000 will likely gain momentum if this resistance zone gives way.
Friday’s Trade
Friday features a wide-open economic calendar with no market-moving events scheduled. Despite the lack of data points, there’s a great chance that the markets will exhibit heightened volatility. The memory of last Monday’s crash is still fresh in every trader’s mind; it will be interesting to see if anyone wants to go “risk-on” into the weekend.
Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.
