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Silver Direction And EUR/USD Correlations

By Brian TwomeyCommoditiesOct 24, 2015 06:40PM ET
Silver Direction And EUR/USD Correlations
By Brian Twomey   |  Oct 24, 2015 06:40PM ET
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From 15.84 current price, silver's historic 25 year average, 150 month or 12.5 year mid point is located at 17.18. The point at 17.18 also corresponds to the 2 year average median line. Current price trades between the 1 and 15 year average from 16.02 and 15.06. The 15 year average at 15.06 is the result from silver's historic May 2001 bottom at 5.95 as price then peaked at 51.67 in April 2011. As silver dropped from 51.67, the 15 year average crossed below every average from the 25 to 1 year. Last time silver saw 5.95 was September 1942 so current price is less than 10 points from historic bottoms.

A break of 15.06, targets next averages at 14.83, 13.58, 12.59, 10.97, 7.76 and 5.57. Above 16.02, targets averages at 16.17, 17.18, 17.55, 17.86, 19.77, 19.88, 20.56, 22.74 and 25.47. What drives current price is the 5 year average at 25.47. Price drops become oversold yet the average is not oversold. Current price is above the 15, 20 and 25 year averages at 15.06, 12.59 and 10.97. Significant peaks are seen in averages 3, 7, 10, 15, 20, 25 and is derived from serious misalignments. The 10 year for example is to low and should be positioned at the 3 year. The 20 year crossed the 25, the 15 year crossed the 1 year.

Targets to align averages from 1 - 25 begin at 11.82, 14.83, 15.27, 15.79, 15.66, 17.89, 16.82, 16.96,21.86 and 33.89. Despite 5.95 historic lows, the best target is 33.89. Current price is 9.89 points from bottoms and 18.05 points from best target above.

The best correlation silver maintains v EUR/USD is found at the 2, 5 and 20 year averages as the 2 year correlates 90%, 5 year at 64% and 20 year at 60%. Remainder averages are all below 50%. The 1 year for example correlates 18%, 7 at 30%, 15 year just crossed at 58%.

The best view long term in silver is historic oversold and way oversold vs EUR/USD. Silver's range from 1915 - 1968 saw 5.63 lows September 1939 and highs at 14.51 in 1968. Since 1968, silver saw first ever highs at 110 in 1979. Short term resolution decides Silver's fate as breaks must be seen at 15.06 and 16.02.

Silver Direction And EUR/USD Correlations

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Silver Direction And EUR/USD Correlations

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