Silver Price Forecast: XAG/USD recovery stalls at $38.00 as the US Dollar firms up

• Silver recovery from two-week lows has been halted at $38.00.
• A moderate US Dollar pickup is weighing on precious metals on Thursday.
• XAG/USD remains capped below trendline resistance, with the broader negative trend intact.
  

Silver (XAG/USD) is posting moderate losses on Thursday, after having rallied about 1.35% on Wednesday. Bulls are struggling to find acceptance above the $38.00 level, with the US Dollar firming up ahead of the all-important Fed Powell speech at the annual Jackson Hole meeting.

The pair drew some support from the renewed political pressure on the Federal Reserve, as US President Donald Trump called for the resignation of Governor Cook over an alleged mortgage fraud. Cook's refusal "to be bullied" and investors' fears that the Fed Chief might cool market hopes of a September cut on Friday keep the US Dollar bid on Thursday.

Technical analysis: XAG/USD is testing trendline resistance at $38.00

The precious metal found support in the area between the 61.8% and 78.6% Fibonacci retracement levels of the early August rally, a common target area for corrective reversals, and bounced higher on Wednesday. The pair, however, remains capped below descending trendline resistance from the August 14 highs, which leaves the broader bearish trend intact

Bulls need to break above the mentioned trendline, now around the $38.00 level and extend gains above the $38.15-$38.25 area (August 19 and 18 highs, respectively), to confirm that the corrective phase is completed, and the path towards the mentioned August 14 high, at $38.73, would be clear.

To the downside, a bearish reversal below the intra-day low of $37.80 would bring Wednesday's low of $37.00 back to the focus. Further down, the next downside target is the August 4 low, at $36.65.