Silver Video 18.08.20.
Weak U.S. Dollar Pushes Silver Closer To Recent Highs
Silver managed to get above $28.00 and continues its upside move as the U.S. dollar declined to yearly lows against a broad basket of currencies.
The U.S. Dollar Index has breached the support at 92.50 and moved lower. In case U.S. Dollar Index manages to stay below 92.50, it will develop additional downside momentum which would be bullish for silver and other precious metals.
A weaker U.S. dollar is a positive catalyst for silver as it makes it cheaper for buyers who have other currencies.
Meanwhile, gold managed to get above the psychologically important $2000 level. Gold continues to enjoy strong support from traders and maintains good chances to revisit recent highs.
Gold/silver ratio continues to decline, providing additional support to silver. Currently, gold/silver ratio is trying to settle below the 71 level. Gold/silver ratio’s RSI is still in the moderate territory so there is plenty of room to develop more downside momentum.
In my opinion, gold/silver ratio has good chances to test the recent lows near 69.50 which would be bullish for silver.
Silver managed to get above the nearest resistance level at $27.75 and continues its rebound.
While silver has quickly managed to get closer to its recent highs after the major sell-off, its RSI is still in the moderate territory which means that there is plenty of room to gain more momentum.
At this point, the nearest material resistance level for silver is located at the recent highs at $29.85. Most likely, silver will face some resistance below this level.
It remains to be seen where such resistance would present itself, especially in the light of recent developments on the U.S. dollar front.
A move above $29.85 will allow silver to gain more upside momentum and head towards $31.00.
On the support side, the previous resistance at $27.75 will likely serve as the first material support level for silver. A move below this support level will open the way to the test of the next support level at $26.20.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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