Silver Price Daily Forecast – Silver Failed To Gain Momentum Above $23.00Silver faced resistance at $23.25 and pulled back closer to $22.50.
Silver Video 23.07.20
Silver Pulls Back After The Major Upside Move
Silver made another attempt to gain momentum above $23.00 but faced resistance at $23.25 and pulled back as the U.S. dollar started to rebound against a broad basket of currencies while gold gained some ground in continuation of current upside momentum.
The U.S. Dollar Index has found support near March lows and is trying to settle above the 95 level. The U.S. Dollar Index has declined from 97.5 to 95 without any material rebound attempt. This move has provided significant support to silver as weaker dollar makes it cheaper for buyers who have other currencies.
In case the U.S. Dollar Index manages to stay above 95 and starts to rebound, silver may experience some pressure.
Gold continues its rally and has recently traded as high as $1888 on a spot basis before pulling back closer to $1870. Just like in silver’s case, gold’s RSI is in the overbought territory, and the risk of correction is elevated.
Gold’s potential pullback will be a negative catalyst for silver, especially after a major rally.
Gold/silver ratio managed to find support near the 81 level and is rebounding, putting additional pressure on silver. Back at the beginning of July, gold/silver ratio was near the 99 level, so the recent downside move was very strong.
Unfortunately for silver bulls, gold/silver ratio’s RSI is in the oversold territory, increasing the possibility of rebound which will be bearish for silver.
Silver faced resistance at $23.25 and lost upside momentum which is not surprising after a huge rally. RSI has started to decline but remains in the overbought territory.
The big rally created major gaps between levels so the nearest support level for silver is located at $21.15. Most likely, silver will be able to find material support above this level.
On the upside, silver will need to get above the resistance area at $23.00 – $23.25 to continue the current upside move. In this case, silver will head towards the next resistance level at $24.50.
From a big picture point of view, silver has just had a major rally, and the risk of a significant pullback is high.
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