Silver Price Forecast: XAG/USD is pushing against $42.75 highs amid US Dollar's weakness

• Silver is testing long-term highs at $42.75 favoured by broad-based Dollar weakness.
• Market expectations that the Fed will hint at a series of rate cuts are hammering the US Dollar.
• XAG/USD is reaching oversold levels, but downside attempts keep finding buyers.
  

Silver's (XAG/USD) is trying to break all-time highs at $42.75 on Tuesday's Early European session, favoured by broad-based US Dollar weakness, as the market braces for a "dovish cut" at the end of a two-day Fed monetary policy meeting on Wednesday.

Precious metals have been thriving in recent days with investors pricing in a series of rate cuts by the Federal Reserve in the coming months, starting with a quarter-point cut on Wednesday.

The US Dollar Index, which measures the value of the US dollar against a basket of currencies, is testing two-month lows, just above 97.00, after depreciating nearly 1% from last week's highs.

Technical analysis: XAG/USD has scope for further appreciation

The technical pìcture is bullish, Momentum indicators show overbought levels on intra-day charts -the 4-hour RSI is above 70, but US Dollar weakness keeps downside attempts limited.

To the upside, above the mentioned $42.75 resistance area, the $43.00 psychological level might hold bulls ahead of the 261.8% retracement of the September 8 rally, at $43.50.

The pair has solid support at a previous resistance in the area of $42.50. Below here, the September 14 and 15 low, at $42.00, and the September 8 high, at $41.65, would come into focus.