Silver markets have bounced a bit after initially plunging on Monday, but quite frankly we are at such lows and should not be a huge surprise. The question now is whether or not $18 will hold.
Silver markets have fallen a bit during the trading session on Monday but then turned around to show signs of life. That being said, the market is likely to see a lot of noisy behavior, and you should also keep in mind that the candlestick that is trying to form does show like it’s a market that could bounce in this general vicinity, especially as the $18 level has been so important. If we stay above the $18 level, then it’s likely that we could see the market trying to reenter a consolidation area with the $20 level above. Furthermore, the 50-Day EMA is also dropping at this point, so it’s obvious to me that could be a bit of a resistance barrier.
Breaking down below the $18 level opens the possibility of a move down to the $16 level, perhaps down to the $15 level. At this point, the market looks as if it’s trying to form some type of double bottom, but if it does not hold, that’s obviously a very bearish signal. The market breaking up of the $20 level opens up the possibility of a threatened $21 level. If we can break above the $21 level, then it’s likely that the $22 level in the 200-day EMA all come into the picture.
At this point, pay close attention to the overall attitude of risk appetite, as the market is going to continue to see a lot of volatility, and therefore silver will struggle to continue rising in an environment that is so volatile, and of course an economy that seems to be slowing down.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.