Silver price meets dynamic support and must hold above $26 for an ascending triangle scenario to remain valid. The US dollar gives up gains ahead of the Fed’s Powell testimony later in the trading week.
The trading week starts on a slow note, with tight ranges everywhere. Silver price declined recently and has met dynamic support against a rising trendline. If the market cannot hold above $26, the bullish scenario given by an ascending triangle is invalidated.
Equity markets continue their rally, with the S&P500 reaching a new high last Friday. Every dip is being bought and summer trading conditions ahead of the Fed’s Powell testimony later in the trading week favour a similar price action.
In Europe, the main equity indices are down slightly, tracking the US futures. The lack of important economic data suggests that the European session will be similar to the Asian one, with tight ranges prevailing.
The US dollar gave up some of its gains as it declined against its peers in the second part of last week. As such, the EUR/USD trades at 1.1880 after dropping below 1.18 last week, and the price action is identical with the other US dollar pairs.
The economic calendar today is light, so technical levels and price action in the equity markets are the drivers for the rest of the trading day.
Markets to Watch
Silver, AUD/USD, EUR/JPY– markets in focus today.
Silver price is meeting strong dynamic support, and it must hold above $26 for a bullish scenario to remain on the cards. The market failed at $30 several months ago, and a possible ascending triangle supports the bullish case. However, a drop and daily close below $26 means that the dynamic support failed, and bears will try to push it even lower.
A bullish divergence formed on the AUD/USD pair as the market has a hard time holding below 0.75. Every time it tried to do so, it bounced back strongly, although the recoveries were not strong enough to break the previous lower high. The bullish divergence suggests more weakness for the US dollar, and a daily close above 0.75 would suggest further strength.
Another bullish divergence formed on the EUR/JPY cross. The 130 level acted as strong support, and this is the second time that the market climbs from this figure. A daily close above 131 looks constructive, while a close below 130 invalidates the bullish scenario.
Winners and Losers
The US dollar looks weak while the US equities remain close to their all-time highs.