Silver Price Forecast: XAG/USD approaches a key support below $38.00

• Silver consolidates losses as the US Dollar appreciates following US trade deals.
• Investors are wary of selling US Dollars ahead of key US data and the Fed's monetary policy decision.
• XAG/USD has a key support area between $37.55 and $37.85.

Silver (XAG/USD) is hovering above the $38.00 area for the second consecutive day, consolidating losses after a significant reversal at the end of last week, as strong US macroeconomic data curbed hopes of Fed cuts and boosted support to the US Dollar.

The precious metal is practically flat on Tuesday's daily chart, with the US Dollar clinging to gains ahead of a string of key US macroeconomic events, namely the Q2 US Gross Domestic Product and, above all, the Federal Reserve's monetary policy decision, both due on Wednesday.

Technical analysis: A mid-term support trendline lies at $37.85

The technical picture shows the XAG/USD correcting lower after an extended rally from April lows, anticipated by the bearish divergence observed in the 4-hour charts and confirmed by Friday's impulsive reaction from the $39.20 area.

The pair is now hesitating right above the July 29 low at $38.00 with technical indicators pointing lower. The 4-hour RSI is close but not yet at oversold levels, which suggests that a further downtrend is likely, and the US Dollar continues to head higher.

Further depreciation would face converging support lines at the ascending trendline from early April lows, now around $37.85, ahead of the July 15, 16, and 17 lows near $37.55. A successful breach of these levels would confirm that the pair completed a 5-wave (Elliott Wave bullish count and is on track to an A-B-C correction.

On the upside, the pair remains capped below Monday's high, at $38.35, ahead of the July 24 low, at $38.75, and the $39.55 long-term high reached last week.