Silver Video 03.06.20.
Silver Is Losing Ground As The Precious Metal Segment Is Under Pressure
Silver is pulling back following the release of the U.S. ADP Employment Change report which showed that the private sector lost 2.8 million jobs in May compared to analyst consensus which called for a loss of 9 million jobs.
This data provided additional optimism to the equity market and put pressure on safe haven assets like the U.S. dollar or precious metals.
The U.S. dollar stays in the downside trend against a broad basket of currencies, and the U.S. Dollar Index is trying to settle below 97.5. Weaker U.S. dollar is bullish for silver as it makes it cheaper for buyers who have other currencies but the precious metal segment is under significant pressure today, and silver cannot ignore it.
Gold failed to settle above $1750 per ounce and is pulling back closer to the key support level at $1700 per ounce. Meanwhile, gold/silver ratio rebounds from the support level at 95. The combination of weaker gold and higher gold/silver ratio puts material pressure on silver.
Silver met resistance below $18.50, lost momentum and pulled back below $18.00. The nearest support for silver is located near the top of the previous upside move at $17.50.
With no significant levels between $17.50 and $18.50, silver should get notable support at the end of this range.
In case silver manages to get below $17.50, it will gain additional downside momentum and head towards the major support level at $17.00. This level has been tested many times, and each attempt to move below $17.00 was met with increased buying activity.
In addition, the 20 EMA has risen to this level, providing additional support. Given the technical setup, silver will need material catalysts to settle below $17.00.
On the upside, the next resistance is located near $18.50. Now that RSI has left the overbought territory, silver has a decent opportunity to continue the upside move in case it is supported by positive catalysts.
A move above $18.50 will open the way to the major resistance level at $19.00. The test of this level could be important for the establishment of a multi-year trend in silver.
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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