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Christopher Lewis

Silver markets have broken down significantly during the trading session on Wednesday, slicing below the $24 level in a sign of extreme weakness. That being the case, a lot of this will have been due to US dollar strength in the fact that people have no way of gauging any type of industrial demand as PMI numbers are starting to soften. With that being the case, it does make sense that we are going to continue to see negative pressure, and I do believe that gold is “going on sale.”

SILVER Video 24.09.20

Underneath, I see the 200 day EMA as potential support near the $20.46 level, but I also recognize that the $20 level underneath is going to continue to offer a bit of support. There is a certain amount psychology when it comes to the $20 level, and of course the 200 day EMA is sitting just above there. Ultimately, that is a technical indicator that a lot of traders will pay attention to, so it is most certainly worth seeing whether or not we get some type of reaction to it. Any type of bounce at this point will be bought into, but we need at least a daily candlestick showing that support.

A hammer, engulfing candlestick, something like that to hang your hat on. In the meantime, I believe that this is a market that continues to fade short-term rallies, as the US dollar breakout is just starting from what I can see. Pay attention to the US Dollar, because it will be crucial, and therefore if it continues to strengthen it means that silver will struggle to gain any type of traction.

For a look at all of today’s economic events, check out our economic calendar.

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