Silver markets pulled back a bit during the trading session on Monday, reaching down towards the $24 level before bouncing again. By doing so, we have formed a bit of a hammer in that hammer of course suggests that we are going to find a bit of a buying opportunity. If we can break above the top of the candlestick, then the market is likely to go towards the $25.50 level, maybe even the $26 level. The 50 day EMA is slicing through the candlesticks of the last week or so, so having said that it looks like the market is simply killing time.
SILVER Video 27.10.20
To the downside, if we break down below the $24 level, we could go looking towards the $23 level, followed by the $22 level which will see the 200 day EMA come into the picture. That being said, it is likely that market participants will find value underneath given enough time, especially if the US dollar takes a bit of a hit. Having said that, the market is likely to see plenty of buyers given enough time, but the question is whether or not we need to see some type of stability anytime soon. Underneath, the $20 level is the absolute floor in the uptrend, so if we were to break down below there the whole thing comes unraveled quite rapidly.
Right now, we are simply paying attention to the US dollar and moving in the other direction as per usual. With the US dollar continuing to strengthen, the idea of silver rallying for any significant of a move is difficult to imagine. Ultimately, this is a market that continues choppiness but I we have further to go to the downside given enough time.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire