- The Silver price has experienced a bit of a pullback against the US dollar during early trading on Friday, but then shot higher as traders read the employment figures.
- However, the market is now racing toward the top of a very bearish candlestick, which is sitting just around the $21 level.
- As a result, traders are waiting to see whether or not the market sees any selling pressure, as it is possible that this is a short-term bounce.
Short Term Bounce Ahead
Technical analysis also supports this idea, as the 50-Day EMA is getting close to breaking down below the 200-Day EMA, which is a longer-term bearish signal called a “death cross.” Additionally, there is a cluster of noise right around the $21 level, making it difficult to break above. If the market can break above the $21.33 level, then it may make a run toward those moving averages. However, the recent major selloff candlestick on Tuesday formed after Jerome Powell reiterated his desire for higher interest rates, which could make it challenging for silver to make significant gains.
If the market falls below the $20 level, it makes sense that it could go down to the $19 level, and even down to the $18 level. While it may not be an easy or quick move, it is obvious that the market continues to grind lower. Additionally, interest rates in America continue to look strong, which could work against silver.
It's important to keep in mind the major negative correlation between the US dollar and silver, as well as between interest rates and silver. Therefore, traders should pay close attention to those markets. However, it's likely that the trading ahead will be choppy and difficult. Because of this, the market is likely to continue to see a need for traders to be very cautious with their position size in order to protect their account.
Silver has experienced a bit of a pullback against the US dollar during early trading on Friday. While the market has shot higher, it is racing toward the top of a very bearish candlestick, making it difficult to break above the $21 level. Technical analysis also suggests a bearish trend, and interest rates in America continue to look strong, which could work against silver. Traders should pay close attention to the negative correlation between the US dollar and silver, as well as between interest rates and silver, and expect choppy and difficult trading ahead.
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