Silver Price Outlook – Silver Continues to See Pressures

Silver Technical Analysis

The silver market gapped lower to kick off the trading session on Thursday and then dropped pretty significantly to break down below the 50 day EMA. We are currently testing an area at the moment that is pretty noisy. So, I do think the area will probably keep the market somewhat afloat, at least in the short term. But if we break down below the $35 level, then we will really start to see a pretty significant acceleration to the downside.

A lot of this is coming down to the idea that the U.S. dollar is strengthening. And if that continues to be the case, silver will take it on the chin as silver is highly sensitive to the strength or weakness of the U.S. dollar in a negative correlation sense. If we do bounce from here, the $37.50 level is an area that we’ll be watching because it was previous resistance and also became support. So, if we turn around and break above there, then it’ll be interesting to see if we can continue above there.

All things being equal, though, I do think that short term rallies probably see negativity at this point, as long as the US dollar continues to show signs of strength. Jerome Powell during the Federal Reserve press conference was not very dovish and therefore not being dovish really rocked the market and it’s at the US dollar higher yet again. And that leads me to believe that we have to watch $35 because this may be the beginning of something bigger.

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