The $22 level sits just below there, so it does make quite a bit of sense that we would see people looking at this as a potential support barrier.
- Silver has bounced a bit during the trading session on Wednesday, as we have bounced from the crucial 200-Day EMA.
- The $22 level sits just below there, so it does make quite a bit of sense that we would see people looking at this as a potential support barrier.
- To see a bit of a bounce from here does make a certain amount of sense, and it’s worth noting that the gold market has tried 3 days in a row to take off to the upside.
The 200-Day EMA underneath should offer plenty of support, at least from a technical point of view. The 200-Day EMA always seems to attract a lot of attention, so this should not be a huge surprise that there might be interest in this area. If we were to break it down below there, then it’s possible that we could see the silver market drop down to the $21 level. I don’t necessarily think that is going to be an easy move to make, but it is one that’s very possible.
A lot of Volatility Coming Down
Keep in mind that the US dollar typically has a negative correlation to the silver market, but it does not necessarily have to be the case. If we do break above the highs of the last couple of days, then it’s likely that we could go looking to the 50-Day EMA which sits just above the $23 level. At this point, the market could then go investigate the $24 level where we have seen a lot of resistance previously. That would obviously take quite a bit of momentum, and if you are trading silver, you should probably keep an eye on the gold market as well, because one will more likely than not lead the other.
They do tend to move in the same general direction, so keep that in mind, and at this point, I think we’ve got a situation where we will see both markets move simultaneously, and of course, you should probably keep an eye on the US Dollar Index, just for a little bit of a secondary indicator. Regardless of what happens next, I think you probably must look at this through the prism of a lot of volatility coming down the road, and I think that will continue to be the case.
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