After forming a massive hammer on Monday, the silver market has follow-through with bullish pressure. A lot of this may have been due to the fact that the US dollar has been on its back foot most of the session, and therefore it is going to take more of those very same US dollars to buy an ounce of silver. Furthermore, we are popping above the top of the hammer that formed right at the 200 day EMA so if there is any place that longer-term traders are going to be paying attention to, I suppose that is a leading candidate.
SILVER Video 02.12.20
Pullbacks at this point in time will probably be supported all the way down to the 200 day EMA, although I am not comfortable jumping “all in” at this point due to the fact that the silver markets of course have been drifted lower for some time, but I do think that we are at a potential inflection point. If we can get a move above the 50 day EMA, that may cause some follow-through in the silver market and therefore I think that it is only a matter of time before we would go looking towards the $26 level. Ironically, the most important chart for the silver market may not necessarily be the silver chart itself. It might be the EUR/USD pair, which has been flirting with finally breaking out above the 1.20 level, which would be a massive breakout.
If that is the case, then we would more than likely see precious metals take off to the upside in a very bullish run. Longer-term I do like precious metals and have been advocating for them for some while, but it has been a tough couple of months.
For a look at all of today’s economic events, check out our economic calendar.