Silver 1 OZ 999 NY (XAG=X) Gains Ground Despite Stronger U.S. Dollar As Optimism Is Widespread

Silver 1 OZ 999 NY (XAG=X) Gains Ground Despite Stronger U.S. Dollar As Optimism Is Widespread

Silver 1 OZ 999 NY (XAG=X) Gains Ground Despite Stronger U.S. Dollar As Optimism Is Widespread

Despite the continued strength of the U.S. dollar, silver is trying to get through the major resistance near the 20 EMA in the $14.50 – $14.70 area.

The U.S. Dollar Index continues its upside move and is currently trying to get through the 101 level, highlighting the strength of the American currency against a broad basket of currencies.

At the same time, the optimism in the markets helps silver to gain some ground. In addition, gold is enjoying upside as well, which is another bullish catalyst for silver.

The market is optimistic on hopes that the situation with coronavirus will stabilize soon, and that governments will start lifting virus containment measures which are hurting the economy.

Today, we see an interesting situation when stocks, precious metals and the U.S. dollar are enjoying upside at the same time. Such moves highlight the nervous nature of today’s markets.

Continued upside in equity markets will likely be bullish for silver which has received less investor support than safe haven assets like the U.S. dollar and gold. However, the situation remains very fluid, and coronavirus numbers could still get worse, especially in the U.S.

Gold could soon be trying to get through the key $1700 resistance level, a test which will also be important for silver. If gold gets to new highs, investors should expect a similar boost to most precious metals since new money will flow into the whole sector.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 15.34.

The projected upper bound is: 16.00.

The projected lower bound is: 13.20.

The projected closing price is: 14.60.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with PREC.M.XAG=). It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 86.6948. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 4 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 47.47. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 9 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 74. This is not a topping or bottoming area. The last signal was a buy 11 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 7 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAG= closed up 0.282 at 14.672. Volume was 8,900% above average (trending) and Bollinger Bands were 128% wider than normal.

Open     High      Low     Close     Volume___
14.382 14.770 14.200 14.672 29,906
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 14.32 16.26 17.01
Volatility: 51 60 38
Volume: 2,991 598 150

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

PREC.M.XAG= is currently 13.7% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume into XAG= (bullish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 26 periods.

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