Silver Price Daily Forecast – Silver Pulls Back After It Fails To Settle Above The 50 EMA

Silver Video 17.04.20.

Global Optimism Does Not Help Silver Gain More Ground

Silver prices corrected aftr they failed to settle above the 50 EMA at $15.60. The was no big catalyst for the correction so it is highly likely that it was technical – based.

The U.S. dollar did not put any additional pressure on silver since the U.S. Dollar Index breached the 100 level to the downside, signaling U.S. dollar weakness against a broad basket of currencies.

Equity markets expressed major optimism after U.S. President Donald Trump revealed a three-stage plan to reopen the U.S. economy. Finally, investors see some light at the end of the tunnel.

Gold prices also corrected but regained some ground. Similar action was seen in platinum. At this point, it looks like the whole precious metal segment experienced some profit taking activity that led to a correction.

Previously, general market optimism helped silver gain more ground. Silver is not viewed as safe haven asset of last resort during the current crisis, so the positive mood in the global markets often helps it gain more ground.

It remains to be seen whether such correlation will continue or silver starts to play a role of a safer asset as equity markets are already trading at rather high levels given the devastating economic impact of the coronavirus pandemic.

In this scenario, silver (and gold) may get more support on bad days for global markets, although the stronger U.S. dollar may become an obstacle for major upside moves in the precious metal segment.

Technical Analysis

Silver continues to trade between the 50 EMA and the 20 EMA. The 50 EMA at $15.60 serves as the first major resistance level for silver. This level has already been tested several times and silver even managed to get above it but failed to settle at higher levels and got back to the previous trading range.

In case silver manages to get above the 50 EMA, it will head towards pre-crisis levels at $16.50.

On the support side, the 20 EMA at $15.00 serves as the first support level for silver. In case it is breached to the downside, silver will likely receive increased support near $14.60.