Silver Video 02.09.20.
Silver Pulls Back After Unsuccessful Attempt To Settle Above $28.50
Silver declined below $28.00 and is trying to settle below the support level at $27.75 as the U.S. dollar continues its rebound against a broad basket of currencies.
The U.S. Dollar Index has managed to get above 92.50 and is trying to gain more upside momentum. Today, the American currency is supported by indications that U.S. Republicans and Democrats are ready to continue negotiations on the new coronavirus aid package.
The optimism about the new round of stimulus is strong, and even the disappointing ADP Employment Change report did not manage to put pressure on the U.S. dollar.
In case the U.S. dollar continues its upside move, silver may get below $27.75 and develop more downside momentum.
Not surprisingly, gold is also under pressure. Yesterday, spot gold made an attempt to settle above the $2000 level but stronger U.S. dollar pushed it closer to the 20 EMA at $1950.
If gold declines below the 20 EMA, it will gain more downside momentum which would be bearish for silver.
Meanwhile, gold/silver ratio is rebounding from recent lows near 69. However, gold/silver ratio’s downtrend remains intact. In case gold/silver ratio declines below 69, silver will get an additional boost.
Silver is currently trying to settle below the support at $27.75 as stronger U.S. dollar continues to put pressure on precious metals. In case silver manages to settle below this support level, it will head towards the next support at the 20 EMA at $26.70.
The 20 EMA is a very important level for silver since a move below this level will signal that the current upside momentum has come to an end. In this case, silver will head towards the next support level at $26.20.
On the upside, the previous support level at $27.75 will likely serve as the first resistance level for silver. If silver manages to get back above this level, it will head towards the next resistance at $28.50.
At this point, silver’s upside trend remains intact, and silver maintains decent chances to get to the test of multi-year highs at $29.85. However, silver will need to stay above the 20 EMA at $26.70 to keep the current momentum.
For a look at all of today’s economic events, check out our economic calendar.