- On Tuesday, silver price experienced a lot of noise below the 200-Day EMA and went back and forth during the trading session.
- As the 200-Day EMA is often followed by technical traders, it is not surprising that people are paying attention to it.
- Additionally, the 200-Day EMA sits around the psychologically significant $22 level, which has attracted a lot of attention due to a gap in the futures market.
Possible Move Upwards
During Monday's trading session, silver formed a hammer while testing the 50% Fibonacci root level. This is a positive sign, but it will require enough momentum to break above the 200-Day EMA. If this happens, the market will likely move towards the 50-Day EMA, and possibly even the $23.50 level. However, the recent selloff has been quite brutal, so it is not unexpected to see a bit of choppiness in this area. If the uptrend continues, it will require a significant amount of work to turn around from the massive selloff.
Traders should pay close attention to the US dollar, as there is typically a negative correlation between the two assets. However, this does not have to be the case. Since silver is an industrial metal, traders should also monitor whether there is significant industrial demand for it. If the economy is slowing down, it could work against silver. On the other hand, some traders may use it to preserve their wealth, which could support its price. This is part of the problem with silver right now, as there are so many different moving pieces.
From a technical analysis standpoint, it appears that the market is trying to turn around and move towards the upside. However, traders should keep a close eye on resistance levels, such as the 200-Day EMA, 50-Day EMA, and the $23.50 level. Additionally, they should monitor the US dollar and any significant news events that could impact the market's performance.
Overall, while there has been a lot of noise in the silver market, traders should focus on technical indicators and significant levels of support and resistance. Additionally, they should monitor industrial demand for silver and the US dollar. If the market can break above the 200-Day EMA, it could indicate a positive trend towards higher prices. However, the recent selloff and choppiness in the market make it difficult to predict the future direction of the silver market with certainty.
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