Silver Prices and US Dollar at Crossroads, Something Has to Give
Markets

Silver Prices and US Dollar at Crossroads, Something Has to Give

DailyFX.com -

What's inside:

  • Silver prices in bullish channel, but facing formidable resistance
  • Based on recent price action, one side of the market will win-out, and soon
  • Dollar support, silver resistance continues to be a theme

Trading Ideas and Education

In the last silver update , we took a look at the rising channel visible on the 2-hr chart and made note of the lower parallel as key support in the near-term. The line held, silver found a bid with the help of US dollar weakness. The bounce from support took it up to the 17.20/33 zone the metal has carved out as resistance on the daily chart; this zone runs all the way back to June , so it's an important one as we are seeing with numerous failed attempts to push through.

Price action is caught between a solid month-long uptrend keeping silver pointed higher and important resistance. This is creating a potentially explosive situation as one side of the market will prevail at some point very soon; based on the wedging action we are seeing a resolution could happen in the next 24-48 hours.

Either resistance will continue to remain formidable and the lower trend-line will eventually break as sellers gain control, or buyers will push silver through to the other side of key resistance and clear a path towards an important intermediate-term trend-line extending lower off the July spike high.

Silver: Daily (2-hr)

Created with Tradingview

The US Dollar Index (DXY) is trying to hold onto the breakout levels around the 2015 peaks, but still remains in a downtrend since peaking on Jan 3. It's moving nearly step-for-step in the opposite direction of silver, with the 21-day correlation sitting at a strongly negative 90%. It's been like this for over a week now, silver at key resistance, dollar at key support -something has to give . And likely very soon.

US Dollar Index (DXY): Weekly

Created with Tradingview

See our Webinar Calendar for a schedule of upcoming live events with DailyFX analysts.

---Written by Paul Robinson, Market Analyst

You can receive Paul's analysis directly via email by signing up here.

You can follow Paul on Twitter at @PaulRobinonFX.

original source

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

Learn forex trading with a free practice account and trading charts from IG .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

ForEx

Latest Markets Videos