Silver Price Daily Forecast – Support At $26.20 In Sight

Silver Video 21.08.20.

Silver Loses Ground Amid U.S. Dollar Strength

Silver made another attempt to settle above the resistance level at $27.75 but lost momentum and declined below $27.00 as the U.S. dollar rallied against a broad basket of currencies.

The U.S. Dollar Index has managed to settle above the 93 level and was trying to get to the test of 93.50 as Euro Area PMI data disappointed investors.

Euro Area Manufacturing PMI declined from 51.8 in July to 51.7 in June while the hit to the services segment was especially evident as Services PMI declined from 54.7 to 50.1.

Not surprisingly, the rapid upside move of the U.S. dollar put significant pressure on precious metals. However, both gold and silver have rebounded from their recent lows as some traders wanted to buy the pullback.

Meanwhile, gold/silver ratio continues to stay in the 72 – 73 range. The volatility of gold/silver ratio has decreased in recent days which is a sign that it tries to stabilize at new levels.

At this point, the direction of the U.S. dollar will likely play a major role for silver in the upcoming trading sessions. In case the U.S. Dollar Index manages to get above 93.50 and continues its upside move, silver will face additional pressure.

Technical Analysis

Silver has recently tested the nearest support level at $26.20 but did not manage to gain more downside momentum as some traders stepped in to buy the dip. In case siver manages to get below $26.20, it will head towards the 20 EMA which is located at $25.75.

A move below the 20 EMA will show that the recent upside momentum has come to an end, so silver may quickly fall to the next support level at $24.95.

On the upside, the nearest resistance level is still located at $27.75. There are no material levels between $26.20 and $27.75 so silver moves freely within this range.

In case silver is able to settle above the resistance at $27.75, it will likely gain additional upside momentum and head towards the next resistance at $28.50. A move above $28.50 will open the way to the test of multi-year highs at $29.85.

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