Silver markets fall during the trading session, testing the 50 day EMA and the center of the overall consolidation region.
Silver markets fell a bit during the trading session on Friday, reaching towards the 50 day EMA. That’s an area that does tend to attract a lot of attention, but it is starting to offer support. That’s a good sign, so I think that the market may try to bounce towards the $15 level. If we can break above the $15 level, then I think the market probably goes towards the $16 level. The alternate scenario of course is that if we break down below the $14.50 level, then we could go down to the $14 level. The overall consolidation level is one dollar deep, meaning that if we break out to the upside, then we gain that dollar. However, if we break down below the $14 level, then we drop down to the $13 level.
I think that silver may be trying to form a bit of a base, but we had recently broken down through a major uptrend line on the 20 year chart. That being said, I think there are a lot of moving pieces and I think that even if we do break down below here it’s only a matter time before Silver finds a reason to go long, and I think that buyers will return eventually, that’s why I anticipate small moves more than anything else right now. The $12 level underneath is massive support, based upon longer-term charts and structure. I think that it’s only a matter of time before buyers return, so I actually prefer buying physical silver, but I do recognize that short-term “buy on the dips” attitude could be the best way to deal with a leveraged market.
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.