Silver Price Daily Forecast – Silver Tests The Key $14.00 Level
Key Support Level Is Tested While U.S. Dollar Rebounds
U.S. dollar is finally rebounding against the broad basket of currencies following days of downside, and this rebound is putting pressure on silver.
The U.S. Dollar Index, which has recently been close to the 104 level, has almost reached 98 before rebounding above 99. Gold prices are resisting this strength in the U.S. dollar and still show gains for the day, but silver is weaker than gold in the current crisis so it is already losing ground.
The U.S. has decided to extend virus containment measures until the end of April, which will put additional pressure on both the U.S. and the world economy. As silver is used in industrial production, such measures will lead to further decrease in demand for physical silver.
It remains to be seen whether any potential increase in investment demand could offset the declines in demand from various industries as the world heads into a material recession.
At this point, gold is the preferred safe haven asset among precious metals, and upside in silver typically requires positive dynamics on the gold price front. This situation will likely stay intact in the near term.
General market upside also plays an important role for silver. Currently, stocks are showing strength despite the alarming coronavirus numbers which have been accumulated over the weekend, but this may quickly change as the market situation is very fluid.
Technical Analysis
Silver is currently trying to hold on to the important $14.00 support level. This level has already been tested several times, and so far buyers have managed to provide enough support for silver.
If this level is breached to the downside, silver may quickly find itself at the next support level at $13.30. A move below this level will signal the end of the current upside momentum. However, it’s not going to be easy for silver bears since such a move will likely require strong outside catalysts like a major market sell-off.
On the upside, the first major resistance is still located near the 20 EMA at $14.75. In case silver prices manage to stay above $14.00, this level could soon be tested.
This article was originally posted on FX Empire
