• Silver has rallied quite nicely during the trading session on Thursday as interest rates have dropped.

• Ultimately, this is a very good sign, and I think eventually silver could go looking to the $90 level.

  

That being said, there are a couple of things that you just simply must pay attention to here because it could make a major difference on what your account sees next. Quite frankly, we have the United States and Iran getting closer to peace, but if that falls apart, that will make rates rise and that will be bad for the XAG/USD pair.

Geopolitical Influence and Technical Resistance

Furthermore, Friday is non-farm payroll in the United States, so that obviously has a part to play in how things turn out in the interest rate market as well. So while this is a very bullish looking market in the short term, it’s also worth noting that we’re at a very dangerous crossroads.

The $82.50 region was a swing high back on April 17 and that’s where we find ourselves now. Because of this, I am a little hesitant to get too aggressive, but I also recognize that we have a situation where eventually we have to resolve whether or not the uptrend can continue.

As things stand right now, I do think it happens but we’ll more likely than not get some type of pullback. I’ll be looking at that pullback as a potential buying opportunity. I’ve got no interest in shorting silver.

I think there’s a hard floor at 70 and we could very well find ourselves in a situation where we just bang around between $70 and $90 longer term with more of an upward tilt because there is a supply constraint out there that can’t be ignored. Regardless, we’re probably one bad headline away from getting a lot of volatility, so size accordingly.

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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.