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Silver Price Daily Forecast – Silver Dives Back Below The 20 EMA

By:
Vladimir Zernov
Updated: Oct 13, 2020, 08:31 UTC

Silver managed to settle below the 20 EMA and gained additional downside momentum.

Silver

Silver Video 17.09.20.

Lack Of Additional Stimulus From The Fed Puts Pressure On Silver

Silver returned back below the 20 EMA as the U.S. dollar gained ground against a broad basket of currencies. The U.S. Fed left the interest rate unchanged and did not promise to expand its asset purchases, providing support to the American currency.

The U.S. Dollar Index managed to settle above the 20 EMA at 93.10 but failed to get above the resistance at 93.50 and declined closer to 93.30. If the U.S. Dollar Index manages to settle above 93.50, it will gain more upside momentum and head towards the 50 EMA at 93.90. This scenario will be bearish for silver.

Not surprisingly, gold is also under pressure. Currently, gold is trying to settle below the 20 EMA at $1945. In recent trading sessions, gold swinged back and forth around the 20 EMA but failed to make a decisive move in any direction. If gold moves towards the 50 EMA at $1915, silver will find itself under increased pressure.

There is a worrisome development for silver bulls on the gold/silver ratio front. After a number of calm trading sessions, gold/silver ratio is trying to settle above the resistance at 73. If gold/silver ratio gets more upside momentum, silver will head towards the nearest support level at $25.85.

Technical Analysis

silver september 17 2020

Silver found itself under significant pressure after traders learned that the Fed would not expand its existing asset purchases. As a result, it declined below the 20 EMA at $26.80.

The nearest support level for silver is located at the recent lows at $25.85. Previously, silver managed to quickly rebound from this level but it should have more chances to settle below $25.85 on its second attempt.

In this scenario, silver will gain additional downside momentum and head towards the next support level at the 50 EMA at $25.10.

On the upside, the previous support at the 20 EMA at $26.80 will likely serve as the first material resistance level for silver. If silver manages to settle back above the 20 EMA, it will head towards the major resistance at $27.75. Most likely, silver will need additional strong catalysts to get above this level.

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About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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