Silver Price Outlook – Silver Continues to See Support Below

Silver Technical Analysis

The silver market has chopped around a bit during the early part of the Tuesday session as we continue to see a lot of noisy behavior overall. With that being said, I think you also have to understand that traders are looking at the FOMC meeting on Wednesday and wondering what Jerome Powell may or may not say. And with that, it’s very important that they are somewhat cautious in this environment because it will cause an extreme amount of volatility.

The market has been consolidating for a while after a major move to the upside. And quite frankly, this is a market that I think, given enough time, will have to determine whether or not there are enough buyers out there to continue the overall uptrend or if we are in a situation where we need to drop to test the $37.50 level, which was previous resistance and now support. Above, we have the $40 level, an area that’s a large, round, psychologically significant figure, and of course, an area that a lot of people will be watching on the whole because it makes for good headlines. And one would have to assume that there is a fair bit of options trading and options barriers in that neighborhood.

So with that, I like the idea of taking a look at the market and trying to find value. The question of course is whether or not you should try to find that value the day before the FOMC and I don’t think that’s the case. If we get a negative reaction and a bounce near the $37.50 level, then I become very interested in this market. Over the longer term, I do believe that the silver market is going to break out above 40 and take the measured move, which would be $2.50, based on the consolidation and send silver looking to the $42.50 level. If we break down below $37.50, then I have to reevaluate but there’s a ton of support underneath there as well.

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