(MENAFN- Daily Forex)
The silver price has gone back and forth during the trading session on Tuesday but settled on an upward move. At this point, it looks as if we are simply going back and forth and trying to stay within the range that we have determined to be“fair value” over the last several weeks. It looks as if the $23 level underneath is massive support, especially as the 50-day ema sits right there as well. As long as we can stay above there, it's very likely that there is still a bullish attitude in the silver market over the longer term.
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That being said, there is also a lot of concern out there about global growth, and that could weigh upon the idea of silver taking off to the upside for a longer amount of time. However, the $25 level is the real key to where we go next. If we could somehow break above the $25 level, it's possible that we could see this market really take off, perhaps sending the silver markets to the $26 level. Anything above that level really gets the momentum going to the upside, just as we had seen during the Great Financial Crisis.
Alternatively, if we break down below the 50-Day EMA, then it's likely that we will go looking to the 200-Day EMA, which sits just below the $22 level. This is an area that makes a lot of sense, and when you look at the silver futures market, there is a gap in that area, so it would make a certain amount of sense to see the market fill it. Regardless, I think you're going to see a lot of noisy behavior in this market, so you should be cautious about your position size. Silver is no joke sometimes because the volatility just gets out of control.
More likely than not, we just hang around in the same rectangle that we have been in for a while, and because of this I think you've got a situation where if you are a range bound trader, this might be a good market for you . However, you have to accept the fact that we are more likely than not going to see a big break out sooner or later, which could cause a lot of volatility and momentum to enter the market.
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