- The silver market initially fell on Thursday but found enough support near the $35.50 level to turn things around and attract buyers.
- With that being the case, the market is likely to continue to see a lot of volatile action, and I do think that the uptrend is still very much intact.
- Because of this, the market is going to probably continue to pay close attention to the $37 level, an area that previously had been resistant, as a potential barrier worth overcoming.
Technical Analysis
If the market were to break out to the upside from here, then we could go much higher, perhaps reaching the $40 level. I believe that it is only a matter of time before we break out to the upside yet again, but we may have to spend some time going sideways for a little $35.50 level in the bottom, and the $37 level in the top. This is a range that could very well hold for a while, but I also recognize that there is a lot going on in the world that could cause chaos.
Keep in mind that silver tends to benefit from a weaker US dollar, which is something that we certainly have at the moment. Because of this, I would be very cautious at this point about getting aggressive because the dollar is getting a bit oversold again, but we have recently seen lower than anticipated inflation numbers, which of course has a major influence on the US dollar itself. This might be a temporary thing though, because sooner or later people were going to question industrial demand. That might be part of the sideways consolidation that we would be watching. Ultimately, if we do end up dropping below the $35.50 level, then we have to look at the $34 level in the 50 Day EMA as support. I don’t have any interest in getting short of silver, but I do recognize that a pullback could come.
Ready to trade our daily forex analysis? Here are the best Silver trading platforms to choose from.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
