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Silver - 10/11/2020

Micro Analysis

10 November, 2020

For General Information only. Not Intended to Provide Trading or Investment Advice. Your Capital is at Risk.

MID-TERM TREND: UP

Silver: Overview

  • Silver is expected to behave like Gold in the coming period assuming a safe-haven role. With so much of uncertainty to come in the period ahead, demand for Silver may rise as well as Gold.
  • US PRESIDENTIAL ELECTION: Democrat Joseph Biden was declared the 46th President of the United States of America. But President Trump has not conceded yet, filing more lawsuits. Trump’s team is expected to file lawsuits this week. They have evidence to sue in as many as 10 states. Then ultimately the Supreme court could consider these legal challenges. Earlier on Monday (November 9), Trump’s campaign filed a lawsuit to block Pennsylvania officials from certifying Biden’s victory in the battleground state.
  • EXPECTED MORE US STIMULUS TO DEVALUE THE US DOLLAR, POSITIVELY SUPPORT GOLD/SILVER: The markets expect soon after the official election results are announced Democrats and Republicans will get back to the negotiating table to discuss another stimulus package. Some Republicans said that a new package should come before the end of 2020. Goldman Sachs predicts a relief package to be approved in December amounting circa $1 trillion.
  • US FEDERAL RESERVE EXPECTED TO KEEP INTERETS RATES NEAR 0.00% FOR A LONGER TIME-PERIOD: Federal Reserve Chair Jerome Powell unveiled a new approach to setting U.S. monetary policy, letting inflation and employment run higher in a shift that will likely keep interest rates low for years to come. Following a more than yearlong review, Powell said that the Fed will seek inflation that averages 2% over time.
  • SAFE-HEAVEN DEMAND FOR GOLD and SILVER DUE TO COVID-19 TRIGGERED FINANCIAL CRISIS: Gold and Silver could be expected to recover as demand for safe-haven assets remains high, supported by rising financial market uncertainties due to growing number of coronavirus cases worldwide. Many markets participants fear over possible implementations of lockdown measures across many countries, which in turn could humper the ongoing global economic recovery. Recent news from Pfizer on their significant COVID-19 vaccine progress injected some optimism within the markets, pushing down the value of Silver by around 2 dollars, but scientists agree that it will take time until a vaccine for mass vaccination is available.

Mid-Term Technical Outlook

  • Silver tried to recover after dropping below the mark of 24.00, when it tested levels below the mark of 23.549 on Monday (November 9).
  • Silver has managed to stay above its 150 Day Exponential Moving average which has been lately acting as the support level.
  • On the upside, Silver could be expected to target Resistance 1 of 25.50 and Resistance 2 of 26.60 in extension. If, however, Silver fails to live up to the above-mentioned technical outlook, it could target Support 1 of 22.520 to the downside.


Graph: (Silver, Daily)

Current Price: 24.00

Silver

Mid-Term

Trend direction

UP

Resistance 3

28.000

Resistance 2

26.600

Resistance 1

25.500

Support 1

22.520

Support 2

21.600

Support 3

20.000

Example of calculation based on trend direction for 1.00 Lot*

SILVER

Pivot Points

Resistance 3

Resistance 2

Resistance 1

Support 1

Support 2

Support 3

Profit or loss in $

40,000.00

26,000.00

15,000.00

-14,800.00

-24,000.00

-40,000.00

Profit or loss in €**

33,792.35

21,965.02

12,672.13

-12,503.17

-20,275.41

-33,792.35

Profit or loss in £**

25,586.31

19,686.23

11,357.44

-11,206.01

-18,171.91

-30,286.51

Profit or loss in C$**

52,060.80

33,839.52

19,522.80

-19,262.50

-31,236.48

-52,060.80

* 1.00 lot is equivalent of 10000 units
** Calculations for exchange rate used as of 9:22 a.m. (GMT) 10/11/2020
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Senior Account Manager regarding their use.
*** You may wish to consider closing your position in profit, even if it is lower than suggested one
**** Trailing stop technique can protect the profit – Ask your Senior Account Manager for more details

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