Checking in on the anti-market and the precious metals leader, USD and Silver
USD (DXY) is creeping through the clear resistance area and ticking above the daily EMA 20, as originally suspected could be the case. Recall that we are allowing for a tap of the downsloping SMA 50 (blue) within the still bearish setup. Come to think of it, USD could even ding the downsloping SMA 200 and then fail.
We don’t even begin to think technically bullish about the buck unless it takes out the previous high at 103.57, but the key to flipping bullish would be the SMA 200 and/or the May high of 104.70. So there is a lot of room for the bounce, should it continue within the short-term still bearish picture.
Not coincidentally, silver, more anti-USD than gold, is making a test of the first support level and its EMA 20, in line with USD’s test of (and tentative break through) resistance. As USD can rise further within its short-term bearish structure, silver can lose support within a still bullish daily chart structure. Important point, however: it has not lost support, and the 24.50 area is very clear support. Not at all flimsy. So let’s also realize that the overbought status has been worked off and if silver is going to bull during or after FOMC week, it’s got a technically green light as it stands now.
Again here, the ultimate key to the short-term rally is the 50 day average, currently 23.78, with an allowance to the SMA 200, currently 22.90 and rising. Fail that and the intermediate rally remains intact as long as the March low holds. But we’ve covered that already. I just wanted to show that silver is testing the 1st support area and ID the SMA 50 and SMA 200 as next potential supports on the shorter-term rally, which began with the big up move on July 12.
