(MENAFN- Daily Forex) silver experienced a significant decline early on Tuesday as PMI numbers from Europe and the United Kingdom were weaker than expected. This led to a broad devaluation of currencies, making the US dollar the default winner in the initial trading hours. However, the release of US PMI numbers has been weak as well, turning the entire thing around yet again.
Advertisement test out your technical skills now! open a free demo account The market is poised to test the 200-Day ema , which lies just below the $23 level. The 61.8% Fibonacci retracement level also comes into play as a potential support level. Although there may be some underlying support, it is evident that market sentiment has turned considerably more negative compared to a few weeks ago. As a result, the market will likely exhibit further volatility as it navigates between the 200-Day EMA and the 50-Day EMA indicators. This continues to be a major influence on how we behave overall.Traders Should be CautiousOne of silver's primary concerns is the potential collapse in industrial demand. If this scenario materializes, silver is likely to underperform gold. While both metals can store wealth, silver tends to be more volatile, making gold the preferred choice for wealth preservation. Consequently, when precious metals experience a decline, silver typically falls more rapidly and severely than gold. Given the negative candlestick formation on Tuesday, it appears that the downward pressure on silver will persist. However, it is essential to monitor signs of exhaustion on short-term charts. Special attention should be given to the behavior around the 200-Day EMA if and when the market reaches that level. On the other hand, if we break above the 50-Day EMA, then we could really pick up momentum again.In conclusion, silver faced significant downward pressure due to disappointing PMI numbers and the resulting devaluation of currencies. The US dollar had benefited as a safe-haven asset, only to turn around again. The market will likely test the 200-Day EMA, and the 61.8% Fibonacci retracement level could provide support. However, the overall sentiment has turned more negative, driven by concerns about industrial demand for silver. Compared to gold, silver is more susceptible to volatility . Traders should be cautious, as the market is expected to remain volatile, and short-term exhaustion signals should be carefully evaluated. The behavior near the 200-Day EMA will be crucial in determining the future direction of silver.Ready to trade our forex daily analysis and predictions ? Here's a list of regulated forex brokers to choose from.
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