Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
Silver Prices Rally into Resistance, Dollar Decider

Silver Prices Rally into Resistance, Dollar Decider

What’s inside:

  • Silver rallying while dollar weakness sets in
  • US Dollar Index (DXY) looks poised for more weakness, while silver faces stiff resistance
  • Sitting on hands for now, scenarios of interest described

If you want to receive Paul’s analysis directly via email, SIGN UP HERE.

On Tuesday, we discussed how the inverse correlation remains quite strong between silver prices and the US dollar (21-day = -88%, only up from -96%), while the negative correlation between gold and the dollar has undergone reversion to the mean (21-day = -48%, up from -98%). Silver has clearly demonstrated relative strength versus gold. A sign of caution from the bear-side of the tape we admittedly should have taken more seriously.

The US Dollar Index (DXY) has fallen in recent sessions from a ‘head-and-shoulders’ top (visible on the 4-hr), trading back below the 2015 highs it overcame in mid-November. It has room to go before support is met at the October high at 99.12 (currently trading at 99.89). If the DXY continues to drop towards support, then silver is likely to continue pushing higher, but…

It must take out the low 17s (~17.30/11) resistance area we've been talking about for several weeks. A pullback during June and the low in October have created a barrier of significance worth attention. It’s challenging this area now, so if the dollar is to continue lower it looks like we will see silver trade above this pivotal area. Whether it can hold or not is another story. All rallies since the July spike high have been sold quickly after finding a high.

Silver: Daily

Created with Tradingview

For now, we are left feeling a little stuck here. As a rule, under no condition do we buy resistance, but without seeing a solid rejection of overhead levels we are left without wanting to be short at this time. A spike high and decline back below the low 17s would pique our interest from the short-side, while a solid break above resistance and subsequent hold as support may be of interest for a long trade.

For trading ideas and education resources, see our Trading Guides.

---Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email by signing up here.

You can follow Paul on Twitter at @PaulRobinonFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.