In Tuesday night's trading session, the silver market made an initial attempt to rally, but encountered resistance near the 50-Day Exponential Moving Average, leading to a reversal. The market finds itself squeezed between the 50-Day EMA and the 200-Day EMA, indicating an impending significant move. The presence of the 50% Fibonacci level near the 200-Day EMA adds further significance to this area. The silver market's trajectory remains closely tied to the performance of the US dollar, warranting attention to forex markets as well.
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Silver's fortunes are likely to be influenced by the US dollar's movements, given their historically negative correlation. The Federal Reserve's intention to maintain tight interest rates for an extended period weighs on the silver market. While this does not necessarily imply a substantial decline, it suggests a potentially slower ascent.
- A breakout above the 50-Day EMA could pave the way for a move towards the $24.25 level, a crucial zone from which silver had experienced significant downside momentum.
- Surpassing this level would be considered a major victory for silver bulls and may fuel further upside momentum, potentially targeting the psychologically significant $25 level and even reaching the recent high of around $26.50.
Conversely, a breakdown below the 61.8% Fibonacci level could lead to silver testing the $22 support level. A breach below $22 would raise the possibility of a more significant decline towards the $20 level. While such a scenario may not be immediate, it remains a potential outcome following a decisive move. Regardless, this is a situation where the market will continue to see a lot of “what ifs”, and therefore it is likely that we will have a lot of uncertainty. The market will be dangerous.
- The silver market finds itself in a squeeze between the 50-Day EMA and the 200-Day EMA, indicating an impending significant move.
- The US dollar's performance continues to impact silver's trajectory, with the Federal Reserve's commitment to maintaining tight interest rates providing a headwind.
- A breakout above the 50-Day EMA would open the path to retesting the $24.25 level and potentially higher targets. C
- onversely, a breakdown below the 61.8% Fibonacci level may lead to silver testing the $22 support level and potentially declining further.
Traders await an impulsive candlestick that will offer clarity on the market's next direction, guiding their subsequent actions.
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