Silver Video 31.07.20.
Silver Tries To Rebound After The Recent Pullback
Silver tries to settle back above $24.00 as gold continues its upside move while the U.S. dollar is flat against a broad basket of currencies.
The U.S. Dollar Index has recently declined below the 93 level but found support near 92.5 and is attempting to get back above 93.
U.S. dollar weakness is bullish for precious metals as it makes them cheaper for investors who have other currencies, and the major decline of American currency has certainly helped the rally in gold and silver.
However, the U.S. dollar is clearly oversold against a broad basket of currencies so there is a significant risk of a pullback which may put some pressure on precious metals.
Meanwhile, gold continues its upside move, which is bullish for silver. Gold futures have even touched the $2000 level while spot gold is yet to break above $1985.
Gold/silver ratio faced resistance below the 85 level and pulled back below 82. Gold/silver ratio’s RSI has returned back into the moderate territory so gold/silver ratio may continue the downside trend in case the right catalysts emerge.
In the near term, silver trading will likely be impacted by the outcome of coronavirus aid package negotiations in the U.S. Successful negotiations may provide material support to the American currency, which will be bearish for silver.
Silver faced resistance near $24.50 and is pulling back. However, silver still maintains chances to settle above $24.00 and get to the test of the nearest resistance at $24.50.
In case this test is successful, silver will head towards the next resistance level at $24.95. A move above $24.95 will open the way to the recent highs at $26.20.
On the support side, the nearest support level is located at $23.25. A move below this level will likely lead to increased downside momentum, pushing silver towards the major support at $22.30.
At this point, silver is set for choppy trading action after the major upside move. For now, silver will likely stay in the range indicated by the recent wild trading day when silver touched resistance at $26.20 and support at $22.30.
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This article was originally posted on FX Empire
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