- The silver market continues to see a lot of noisy trading, as the market has been a bit overstretched for a session or two.
- At this point, the market looks as if it is willing to go higher, but we have to see a bit of value brought back into the market via dips.
- This market has broken above the $37.50 level recently, showing signs of serious strength, but we may have gotten ahead of ourselves at this point in time.
Technical Analysis
The 50 Day EMA sits at the $35.48 level below, and is rising, so it will continue to make a lot of sense for traders to look at it through the prism of a trendline. This has been the case for a while, until at least we decided to jump so much higher. The $37.50 level should have a lot of support attached to it, as “market memory” continues to attract a lot of technical traders.
This is a market that has been moving on the US dollar weakness for some time, and if that continues to be the case, this should be a market that you watch along with the US Dollar Index overall. This is a great way to play against the dollar weakness, as we continue to see that massive negative correlation. This is a market that is volatile under the best of circumstances, so we will have to be careful about position sizing and timing in this market. Ultimately, the silver market continues to be positive, but the pullbacks could be vicious at times, but as long as we stay above the $37.50 level, this is a market that should eventually test the crucial $40 level, a large, round, psychological figure that will attract a lot of attention, and therefore I would expect a certain amount of resistance. Anything above there, then the market really starts to take off.
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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.