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Christopher Lewis

Silver markets gapped higher to kick off the trading session on Tuesday, and then went back and forth to show signs of resiliency, but also showing signs that perhaps it is running out of momentum to the upside. The 50 day EMA sits at the $24.89 level, essentially the $25.00 region which of course is a large, round, psychologically significant figure. The market pulling back from there makes quite a bit of sense, and I believe that you will probably get a bit of a pullback sooner or later in order to pick up silver “on the cheap.”

SILVER Video 30.09.20

To the downside, I believe that the $22.00 level underneath will offer a bit of support as it has recently, and of course we had formed that nice-looking hammer from last week. If we break down below there, we go looking towards much more substantial support in the form of the 200 day EMA and of course the $20.00 level in that same general vicinity. With that being the case, the market is likely to see a lot of noise in that area and an opportunity to pick up silver at a better price.

That is not to say that you cannot buy here, just be aware the fact that the $25 level is probably going to cause a significant amount of resistance. If we do break above the 50 day EMA, then the next area of major resistance is $27. Nonetheless, I still believe that silver is an uptrend, but silver seems to be especially sensitive to the negative correlation to the US dollar.

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

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