Silver Video 30.06.20.
Silver Tries To Get Additional Upside Momentum
Silver continued its unsuccessful attempts to get above the resistance at $18.00 as the U.S. dollar gained ground against a broad basket of currencies while gold was mostly flat.
A stronger U.S. dollar is bearish for precious metals since it makes them more expensive for investors who have other currencies. Currently, the U.S. Dollar Index is making a serious attempt to settle above the key resistance level at 97.5.
If this attempt is successful, the U.S. dollar will likely gain additional upside momentum which will be a headwind for silver.
Meanwhile, gold stays above the $1750 level and maintains its strength as traders bet on additional upside. The coronavirus pandemic continues to progress in the world, supporting demand for safe haven assets.
Gold/silver ratio has settled below the 20 EMA at 99.30. Recently, gold/silver ratio tried to develop upside momentum above 100 but failed and returned back below this level.
Recent economic data shows that the recovery is progressing faster than analysts expected which is good for silver which is dependent on industrial demand. However, fears about the second wave of coronavirus put some pressure on silver and do not allow the downside trend in gold/silver ratio to resume.
Silver continues to trade near $18.00 but fails to get above this resistance level. I’d note that while silver has actively traded between $17.50 and $18.00 in the previous week, the trading range is getting tighter which means that chances for a breakout are increasing.
In this situation, a move above $18.00 should result in a significant upside momentum, and silver will quickly head towards the next resistance level below $18.50.
Silver has been mostly trading in the $17.50 – $18.00 range for a month, so it will have solid chances to get to the test of the major resistance at $19.00 in case it gets above $18.00.
On the support side, the nearest major support level is located at $17.50. However, the 20 EMA continues to rise so it may soon provide some support at higher levels.
A move below $17.50 will put the current upside trend under question, while a move below the next support level at $17.00 will signal the beginning of a new downside trend.
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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