Silver has gone back and forth during the trading session on Wednesday, as we are hanging about just above the $24 level. The $24 level of course is a large, round, psychologically significant figure, in an area that previously had been important. Now that we are trading the Wednesday session, we will have to pay close attention to the idea of the market trying to find its footing, as it has broken down rather significantly. All things being equal, the market has sold off so drastically that I would assume that sooner or later people are willing to pick up a little bit of value in this silver pits.
If we do break down below the $24 level, it could be a sign that we are ready to drop down to the 50-Day EMA. The 50-Day EMA is an indicator that will attract a lot of attention, especially as it is rising. All things being equal, this is a market that I think value hunters will return, but the next day or 2 might be somewhat quiet. After all, we have the jobs number coming out and that will have a major influence on the bond market.
The bond market of course has a major influence on silver, as rising rates tends to work against it. All things being equal, this is a situation where the next couple of days could give us an idea as to where we are going longer term, especially as the market has been so noisy as of late. If we do break down from here, then we could see a little bit of a bounce, but if we were to break down below the 50-Day EMA, then we could start to see a significant breakdown. I don’t see that happening anytime soon, but it is something you need to keep in the back of your mind. If we turn around and break above the $24.50 level, that’s also a sign that we are ready to continue to the upside and perhaps challenge the highs again. Either way, keep your position size reasonable as this market is noisy at the moment, even more so now that the Monday trading session has come and gone.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.