Silver Video 24.09.20.
Silver Continues To Lose Ground Amid Strong U.S. Dollar And Fears About The Pace Of Economic Recovery
Silver made an attempt to settle below the $22 level as the U.S. Dollar Index moved closer to the nearest resistance level at 94.65.
The U.S. dollar got an additional boost after the release of disappointing U.S. employment reports. Initial Jobless Claims increased to 870,000 while Continuing Jobless Claims fell to 12.58 million. Both reports were worse than the analyst consensus and provided support to the American currency which has recently regained its status of a safe haven asset of last resort.
Strong U.S. dollar is a bearish catalyst for silver and other precious metals so the continuation of the dollar’s upside move will likely push silver to lower levels.
Gold is also under pressure. Currently, gold is testing the $1850 level. The nearest significant support for gold is located at $1815. If gold moves towards this level, silver will find itself under increased pressure.
Meanwhile, gold/silver ratio continues its major upside move. Just a few days ago, gold/silver ratio was firmly settled in the range between 71 and 73. Currently, it is trying to get above 84. Gold/silver ratio’s RSI has entered into the overbought territory so chances of a pullback are increasing. If gold/silver ratio moves towards 80, silver will have an opportunity to gain some upside momentum.
Silver managed to settle below the nearest support level at $22.30 and continues its downside move. Currently, it is trying to settle below $22.00. If this attempt is successful, silver will head towards the next support at the recent lows at $21.65.
If silver gets below the support at $21.65, it will develop additional downside momentum and head lower. There are no material levels between $22.30 and $20.00 so silver may get to $20.00 quickly in case the right catalysts emerge.
At the same time, RSI has moved into the oversold territory, suggesting that a rebound may be around the corner.
The previous support at $22.30 will likely serve as the first resistance level for silver. A move above this level will open the way to the test of the next resistance at $22.90, which is followed by the resistance at $23.30.
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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