- Silver initially tried to rally a bit during the trading session on Wednesday but gave back gains to show signs of hesitation.
- By doing so, I think this is a scenario where traders are just simply killing time, trying to sort out where they are going to go next, and perhaps trying to attack the $34 level.
The $34 level is an area that’s been important multiple times. And I think if we can break above the $34 level, we could very well see this market go racing towards the $35 level. Short term pullbacks continue to be noisy and common. I think you will continue to see more of that going forward. The 50 day EMA sits just below the $33 level and as it’s flat, I think it just reiterates the idea that perhaps the markets don’t have anywhere to be. If we were to break down below the 50 day EMA, then it opens up the possibility of a move down to the $32 level, which is at the bottom of the range and an area that the 200 day EMA is currently trying to do everything it can to reach.
Buy on the Dip
With this, I do believe that we remain very much in a buy on the dip type of situation. But I don’t necessarily think that you have to get too aggressive here. Once we clear up this consolidation, then you can perhaps get a little bit more interested in the market. Now, that being said, if you are a short-term trader, the back and forth trading of this market might be appealing. But as usual with silver, you will have to pay close attention to your position sizing because silver can really rip higher or lower on headlines. So, caution is a better part of valor.
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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.