- Silver experienced a robust surge in its price during Friday's trading session, hitting a crucial support level in the process. This development is significant, as it sets the stage for potential resistance ahead.
- The burning question now is whether silver will retreat from this point or continue its recovery. A pullback at this juncture might signal that the recovery has run its course, potentially sending silver plummeting, with the $22 mark as a likely target.
- However, it's crucial to bear in mind that silver is a remarkably volatile instrument, demanding a cautious approach when determining position sizes.
Upon examining the chart, it becomes evident that the area where the market approached during the early stages of the US trading session has served as formidable support in the past. Market memory, in this case, suggests that this level holds significance. Thus, it's particularly intriguing to observe the market's next move. A decline from this juncture could signify a continuation of the overall downtrend. Conversely, breaching the $22.60 level in the futures market opens up the possibility of a complete silver recovery. Key moving averages, such as the 50-Day EMA and the 200-Day EMA indicators, loom above that level, potentially acting as resistance points. Nevertheless, surpassing these hurdles paves the way for silver to venture significantly higher, with the $25 level on the horizon.
One thing remains certain amidst the uncertainty—volatility. Silver is renowned for its price swings, and this characteristic necessitates a judicious approach to position sizing. Instead of trying to anticipate the market's moves, it's advisable to add to positions that are currently profitable.
Be Cautious and Prudent with Position Sizing
Traditionally, silver tends to move inversely to interest rates and the US dollar. However, it's essential to acknowledge that these correlations can occasionally break down. Therefore, traders must stay vigilant and adaptable in their strategies.
In conclusion, Friday's trading session delivered a strong candlestick in the silver market. The question that lingers is whether this momentum will persist. As traders navigate these uncertain waters, a cautious approach, prudent position sizing, and a keen eye on key resistance levels are the order of the day. Whether silver continues to shine or loses its luster in the near term remains to be seen, but one thing is for sure volatility will be the name of the game.
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