Silver markets have gone back and forth during the course of the week, initially testing the bottom of the ascending triangle that we have been in previously. The 50 week EMA is sitting just below that triangle, and therefore it does offer a significant amount of support. That being said if we can break above the top of the weekly candlestick, then it is likely that we will at least attempt to try to take on the massive selling candlestick from the previous week. I could open up a move towards the $27.75 level, which of course approaches the $28 level which has been a bit of a major barrier that extends all the way to the $30 level.
SILVER Video 05.07.21
If we were to break above the $30 level, then it is likely that we would see the silver market go looking towards the $50 level based upon historical precedence. That being said, we have a lot of work to do before we ever get there, and as a result we have to keep in mind that broken down below the 50 week EMA could open up selling pressure, perhaps down to the $24 level, and then eventually the $20 level over the longer term.
A lot of traders will pay close attention to the negative correlation between the US dollar and silver, but you should also keep in mind that the reopening trade demands a lot of silver, and therefore I think what we have is a potential shakeout in what is a very volatile market. As things stand right now, this is a market that still looks bullish, but it has got a lot of work to do and therefore I would not expect quick moves.
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This article was originally posted on FX Empire
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