Western leaders might escalate sanctions further if Russia doesnt call their troops back to their bases.
The market may extend uncertainty as Blinken-Lavrov's meeting call-off.
Silver (XAG/USD) retreats from the lows of $24.10 in the Asian session as US Secretary of State Antony Blinken abandons meeting with Russian Foreign Minister Sergey Lavrov. The move from the former is the outcome of Moscows arbitrariness. The Kremlin has underestimated the threats of imposing sanctions from the Western leaders. This has underpinned the risk-off impulse in the markets and silver jumps eventually.
Russian leader Vladimir Putin labeled two regions in eastern Ukraine as ‘Independent’, which confirmed the warnings from the West that Russia is planning to invade Ukraine. Meanwhile, Moscow also built troops in those regions after getting a green signal and support from separatist leaders. This had forced Western leaders to come out with sanctions on Russia. Adding to that, the Western leaders might escalate sanctions further if Russia doesnt call their troops back to their bases.
The US dollar index (DXY) is consolidating in a narrow range of 30 pips in the Asian session as it fails to capitalize upon the call-off of the Blinken-Lavrov meeting. Meanwhile, the odds of an aggressive monetary policy by the Federal Reserve (Fed) are losing traction, which has underpinned the silver against the greenback.
XAG/USD Technical Analysis
On a four-hour scale, Silver (XAG/USD) is trading in a rising channel in which every pullback towards the lower trendline is considered as an opportunity to initiate long positions. The 50 and 200 periods Exponential Moving Average (EMA) are trading higher, which indicates that bulls are confident for more upside. The Relative Strength Index (RSI) (14) is comfortably holding above 60.00, showing no signs of divergence and overbought.
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