Silver Video 20.10.20.
Silver Gains Ground On Weaker U.S. Dollar
Silver continues its attempts to settle above the nearest resistance level at the 50 EMA at $24.50 as the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index has managed to settle below the 20 EMA at 93.50 and is declining towards the 93 level. If the U.S. Dollar Index settles below the support at 93.00, it will gain additional downside momentum which will be bullish for silver.
Meanwhile, gold is stuck at the 50 EMA level at $1905. Gold failed to develop any momentum in recent trading sessions but managed to stay above the $1900 level. If gold moves above the 50 EMA, it will have a chance to develop upside momentum and get to the test of the next resistance at $1930 which will be bullish for silver and other precious metals.
Gold/silver ratio continues its downside move and is currently declining towards the 77 level. If gold/silver ratio gets below 77, it will move towards the recent lows near 75.50 which will be a favorable scenario for silver.
Silver is trying to move above the nearest resistance level at the 50 EMA. Silver has already tested this resistance level several times but failed to gain sufficient upside momentum.
If silver manages to settle above the 50 EMA, it will move towards the highs reached during the previous trading session near $25.00. A move above $25.00 will open the way to the test of October highs at $25.55.
On the support side, the nearest support level for silver is located at $23.90. There are no material levels between $23.90 and the 50 EMA at $24.50 so silver may quickly get to the test of the nearest support level in case the right catalysts emerge.
A move below the support at $23.90 will push silver closer to the next support level at $23.30.
From a big picture point of view, silver needs to settle above the 50 EMA in order to continue its upside move. If silver fails to move above this resistance level, the risks of a sell-off will increase.
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This article was originally posted on FX Empire
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