Silver Forecast Today - 02/01: Silver Struggles (Chart)

(MENAFN- Daily Forex)

• In my daily analysis of the commodity markets, the silver market has captured my attention because I think it's sitting at such a precarious level.
• Quite frankly, silver has underperformed a lot of other commodities, which makes a lot of sense considering that silver is a little bit more volatile and a little bit further out on the risk appetite spectrum than others, and of course it's also an industrial metal.
• In other words, we have a huge mess of potential issues.

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The technical analysis for this pair is getting more dire by the day, but it's not a complete disaster quite yet. It's worth noting that over the last couple of weeks we have broken through the neckline of a potential head and shoulders pattern, bounced enough to test that neckline, and then fell again. We have also broken through a significant trend line, and the large, round, psychologically significant figure of $30. By doing all of that, it is rather dire looking.

However, the one thing that we are looking at as potential support is the low from last week. As I write this article, we are barely hanging onto that, so I will use the $28.50 level as a proxy for further negative pressure. We have been bouncing around the 200 Day EMA, and that does make a certain amount of sense that it would cause a little bit of hesitation. Quite frankly though, I think one of the biggest technical indicators worth paying attention to at the moment is that indicator, because it can set up whether or not we are in an uptrend or a downtrend from a longer-term perspective for a lot of people.

If we do break down from here, I believe that the $26.50 level is going to end up being the initial target. On the other hand, if we break higher, then the $30 is crucial and we need to break above there and close on a daily candlestick for me to start getting bullish on silver again. I suspect silver is at best going to be sideways.

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