Silver Forecast: Looking Towards the 26 USD Level

Christopher Lewis

The silver markets got hammered during the trading session on Thursday, as the risk appetite of traders were all over the place. 

The NASDAQ 100 lost about 5% at one point, and that was just the beginning of issues. Ultimately, I think that the market is still very much in an uptrend, so you need to look for some type of value to take advantage of. Underneath, the $26 level is a massive support level as we have seen previously, so I do think that it should offer a bit of a “floor the market.”

When you look at the silver market, you can see that we have been grinding higher in a bit of an ascending channel, and at this point not much has changed. The 50 day EMA looks like it is going straight towards the $25 level, and then eventually the $26 level. The candlestick of course is rather negative looking, and we are closing towards the bottom of the candlestick which typically means there is a little bit of follow-through. Looking at this chart, I do believe that we are going to go much higher, the $28 level course is an area that has caused some issues, but we have recently peeked through there again, so I think it is only a minor issue.

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To the upside, I believe that the market will probably go looking towards the $29 level, and then eventually the $30 level. If we can break above the $30 level then it is likely that the market could go much higher, reaching towards the 50 day EMA over the longer term. I do not like the idea of shorting silver at this point, because quite frankly the US dollar will continue to struggle, and of course precious metals might get a bit of a boost due to the fact that people are becoming a bit nervous in general. After all, if fiat currencies continue to be devalued by central banks, that could be a leading factor for precious metals to go much higher. You can also make a bit of an argument for a bit of an ascending triangle, so all things being equal it does point towards a higher level, but volatility is probably the main thing that you should be looking at here.

Silver

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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