Silver jumps and RBA hikes rates by less than expected
Silver => The commodity rises towards 21.00
BTC/USD => The cryptocurrency rises above 19.5k
AUD/NZD => The pair falls towards 1.1350
Silver surges over 8.8%
Precious metal Gold and particularly silver jumped sharply higher after the weaker than forecast ISM manufacturing data. Silver ended the session 8.8% higher after data showed that the slowdown in manufacturing activity accelerated in September, with the PMI falling to the lowest level in two and a half years. News orders slid, and employment in the sector also slowed. The data suggests that the US economy could start to slow, removing the need for aggressive hikes from the Federal Reserve. Today silver is holding steady as attention turns to JOLTS job openings data and a slew of Fed speakers who could shed more light on how aggressively the Fed plans to hike rates in November.
| US ISM manufacturing PMI | Actual: 50.9 (1.9) | Previous: 52.8 |
Where next for the silver price?
Silver rebounded off the 17.96 low hit last week, recapturing the 50 and 100 sma. The bullish RSI also keeps buyers hopeful of further gains. Buyers will look for a move over key resistance at 20.90 to expose resistance at 22.50, the late May high. Meanwhile, should the sellers defend 20.90, bears could pull the price back towards support at 20.15 the 100 sma and 19.35 the 20 sma. A fall below 17.97 last week’s low and 17.55 the 2022 low will create a lower low.
BTC/USD rises as weaker data is cheered
BTC/USD rose above 19.5k in the previous session, boosted by hopes that the Federal Reserve could soon start to take its foot off the hiking gas, at least slightly. In a time when bad news is considered good news, the cryptocurrency rose after weaker than expected US ISM manufacturing data showed signs that the sector was slowing as interest rates rose. This data certainly didn’t send BTCUSD surging higher, but it offered some support and brought optimism that there is light at the end of the hiking tunnel. BTC/USD tracked US equities higher, with the tech-heavy Nasdaq closing up 2.3%. BTC/USD is unlikely to move out of the familiar19k-20k level until the Fed does a divis pivot.
RBA falls post-hike, RBNZ up next
AUD/NZD fell 0.6% yesterday after the RBA raised interest rates by a smaller than expected 25 basis points. The move ended a run of outsized hikes sending the Aussie sharply lower. RBA governor reiterated the central bank’s commitment to tightening, but at a slower pace. Attention now turns to the RBNZ rate decision, where the central bank is expected to raise interest rates by 50 basis points for a fifth straight meeting. There are growing expectations that the RBNZ could keep tightening into next year to keep up with the Fed. The OCR rate is expected to rise to 3.5% from 3% in the year’s final meeting, with bets rising that the RBNZ could lift rates to 4.5% or higher in 2023. A hawkish-sounding RBNZ could lift the kiwi.
Support can be found at 1.13 (round number) and 1.1250 (August high).
Resistance for the pair can be seen at 1.1440 (August high) and 1.1490 (2022 high).
