Silver Price Analysis – Silver Drops to Test Support Area

Silver Technical Analysis

The silver market has fallen after gapping lower on Thursday to test the crucial $70 level. The $70 level is an area that a lot of people will be watching as it is the bottom of the overall consolidation that we have been in for a couple of months now.

If we break down below the $70 level again, I suspect we are looking at a situation where traders will be pondering whether or not we can get down to the 200-day EMA, currently sitting just below the $62 level. This is an area that I think needs to hold to build confidence if we do break down from here.

Technical Support and US Dollar Strength

I do think this is a situation where traders continue to see a lot of fear out there and I think US dollar strength really working against the value of silver. This is mainly because of yields rising in America, as traders react poorly to the FOMC meeting and press conference.

I don’t like this market at the moment, but I do believe that if we were to bounce, then if we get a little bit of momentum, it could end up being a nice move towards $80. If we can break that, it would be very bullish in my estimation.

If we break down, then the 200-day EMA must hold or then you start to talk about the fact that there is just nothing holding this market up. We will probably go looking to $50 at that point. In this environment, traders need to be very careful with what they are doing and how big their positions are.

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