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MENAFN- Daily Forex)
- In my daily analysis of the silver market, I can see that the asset has been pummeled during the trading session, after a couple of different Fed speakers have spoken at the Jackson Hole symposium.
- Ultimately, what they are suggesting is that the Federal Reserve may or may not cut rates in September, and this of course has rattled the markets.
- We have seen silver get absently hammered as the US dollar picked up a bit of a bit, and rates of course dropped.
Whether or not this is actually a real thing remains to be seen, and this just goes back to the usual“Wall Street needs cheap money” narrative that we have seen more than once. As long as Wall Street continues to beg for handouts, we will have this type of behavior. That being said I also believe that the market is going to continue to be extraordinarily volatile and it's fair to say that we were a bit overstretched anyways. Because of that, a pullback made a certain amount of sense from a technical analysis standpoint as well.
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It's probably worth noting that the 50-Day EMA has offered a little bit of support, and it's probably even more worth noting that we are seeing a bit of support near the $29 level. Even if we were to break down below here, the $28.50 level is an area that a lot of people will be paying attention to, as it is an area of previous support and resistance, and we have seen a lot of noise in this general vicinity. In fact, I anticipate that there will be a certain number of trading public out there that believes this is going to offer a bit of value that they should be taking advantage of.
On the upside, if we were to break the $30 level and go higher, then I think you have a real shot of silver taking off toward the $31.50 level, and possibly beyond that. In that environment, we probably see the US dollar get pummeled, and it's more likely than not traders continue to focus on the Federal Reserve.
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