- Silver has been launched out of a cannon during the trading session on Friday as we have broken above the crucial $37.50 level, causing a massive, short squeeze.
- The market is above the $39 level. And if you have been listening to me recently, I suggest that if and when we break out, we probably go to the $40 level based on the measured move.
- What I didn’t know is that we were going to get most of the way there in just a few hours, but here we are.
At this point in time, I think you’d look at this through the prism of a short-term buy on the dips type of scenario in order to find some type of value and continue with the overall long-term uptrend. The $37.50 level is an area that should now offer pretty significant support as market memory should come into the picture.
US Dollar and More
Pay attention to the US dollar. If it starts to fall, that only helps Silver’s case. But I think this had been going to happen for some time. You can see that we had been consolidating for a while and just kind of pressured the upside. This has been a massive launch higher. So, what you’re more likely than not going to have to do is wait for a pullback on a shorter timeframe chart, perhaps the one hour chart, and a bounce to start following right along.
If we continue to go higher, then I would expect to see a certain amount of trouble at the $40 level, mainly based on psychology more than anything else. Ultimately, this is a market that I think continues to be very bullish, has been bullish for a while. And now the question is, when will gold hit its new all-time high? Or I should say, in that case, a new all-time high, I should point out that this is not the all-time high for silver. But typically, what happens is when one of them breaks out, the other one follows.
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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.