Silver markets have gone back and forth during the trading session on Wednesday as we are testing the 50 day EMA. This is obviously a widely followed indicator, so it should not be a huge surprise that we are sitting here. Furthermore, we are right at the $24 level which is essentially in the middle of the overall consolidation, and furthermore we have seen a massive move to the upside on Monday that people will be looking to digest the gains from. Ultimately, I think a short-term pullback is very likely.
SILVER Video 03.12.20
Having said that, the US dollar is on its back foot, and that should continue to boost the value of the silver market as well as other commodities. I think buying on the dips continues to work and people are starting to build up a bit of a potential long-term position. Ultimately, if we can break above the top of the candlestick for the trading session on Wednesday, that also sends this market higher but keep in mind that the next couple of days could be a bit noisy due to the fact that the jobs number comes out on Friday. Between now and then, markets might be a bit quiet but as the EUR/USD pair has broken the massive resistance barrier at the 1.20 level, that suggests that currency moves alone could drive silver higher.
Underneath, the 200 day EMA sits just below the $22 level which is the bottom of the overall consolidation range, so I think in general this is likely to continue to offer a bit of a “floor” in the market going forward. Furthermore, the 38.2% Fibonacci retracement level is in this general vicinity.
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