To begin with, silver does tend to be sensitive to interest rates in the United States, which of course have been rather high and may stay that way for a while. Also, you have to keep in mind that if there is a recession the industrial demand for silver should drop. Just above, we have the 50-Day EMA that comes into the picture as resistance as well. After that, then you have the 200-Day EMA just above it. That being said, both of those moving averages are flat, so that tends to suggest that we don’t really have anywhere to be in the short term, just as we have not had anywhere to be for a while.
If we can break above the top of the candlestick for the trading session on Wednesday, then we can start to dig right into those moving averages. Breaking above there and then the top of the flag would be the goal for the bulls out there, and once the market does that, it’s very likely that silver could go looking to the $25 level after that.
On the other hand, if we were to turn around and break down below the lows of both Wednesday and Thursday, that could open up and move down to the $22 level. Anything below there would be very ugly for the silver market, perhaps opening up a move down to the $21 level next. I would anticipate a lot of noisy behavior, which is typical for this market to begin with so keep your position size reasonable as you navigate all of the volatility that is inherent in this market.
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