Silver Video 29.07.20.
Silver Flat Ahead Of Fed Interest Rate Decision
Silver managed to stay above $24.00 after the wild trading action seen on Tuesday.
Today, the key catalyst for silver and other precious metals is the Fed Interest Rate Decision and comments from the Fed Chair Jerome Powell.
Ahead of the rate decision, the U.S. dollar is losing ground against a broad basket of currencies, and the U.S. Dollar Index is testing the support level at 93.5.
A move below this support level will be bullish for silver and other precious metals since weaker dollar makes them cheaper for buyers who have other currencies.
I’d note that the U.S. dollar was also under pressure on June 10 ahead of the previous Fed Interest Rate Decision but then reversed course. If this pattern is replicated today, silver may experience a sell-off.
Meanwhile, the rally in gold continues. Yesterday, spot gold set a new record high at $1981 per ounce but then pulled back a bit. Today, gold is trying to continue the upside move and is currently trading near the $1960 level.
Gold/silver ratio is trying to settle above the 80 level after yesterday’s dive below 76. Gold/silver ratio made a serious downside move in July so it may need some time to stabilize at new levels.
Silver is trying to settle above the $24.00 level which emerged as the nearest support level.
RSI is still in the overbought territory and the risk of correction is high, although near-term trading dynamics will likely depend on the Fed’s commentary and subsequent moves of the U.S. dollar.
The previous upside move was very fast so there are no important resistance levels before the recent high at $26.20. However, such levels will likely present themselves if silver continues to move higher.
On the support side, a move below the nearest support level at $24.00 will open the way to the test of the next support level at $23.25.
At this point, a major support level for silver is located at $22.30, at the low of the previous trading day. A move below this level will mark the end of the current upside momentum.
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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