Silver Price Outlook – Silver Drops from the Ceiling

Silver Technical Analysis

Silver initially did try to rally a bit during the trading session on Monday but found that the $37.50 level to be far too resistive yet again. By pulling back from there, it shows that we still see plenty of selling pressure in that overall region. And I think that is a very important thing to pay close attention to. We have been bouncing around between the $35 level and the $37.50 level for a while. And with that being the case, I think we’re just simply consolidating in a larger area, a lot like the gold market for that matter.

After initially shooting higher, the market will spend some time trying to work off some of this froth and then eventually I think break out. If we can break above the $37.50 level, then it opens up the possibility of silver driving towards the $40 level. On the bottom, the $35 level is a major support level and breaking below there would be a bad sign, but not necessarily a trend change.

It is backed up by the 50 day EMA. So that comes into the picture as well, but it’s really not until we drop down below $33 that I would be concerned about the trend, which is basically where the 200 day EMA is hanging out at the moment. Remember, there’s a big negative correlation between silver and the US dollar. So, pay attention to what’s going on with that currency as well.

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