(MENAFN- Daily Forex)

• Silver has been highly volatile around $47, trading above its rising 50-day EMA near $45.88.
• Despite recent strength, I expect consolidation below $50, with pullbacks offering potential buying opportunities amid lingering resistance.

Silver continues to show a lot of volatility during the early hours on Wednesday as the $47 level has attracted a certain amount of interest. The market is sitting above the 50-day EMA, which is near the $45.88 level and rising. So, with all of that being said, short-term pullbacks offer up buying opportunities in a market that has gotten way too ahead of itself.

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Ultimately, this is a market that is likely to continue to see sideways action overall. So, despite the fact that the Wednesday session has been so strong, the reality is that the market is likely to continue to see a lot of overhead and overhang pressure. The $48 level is an area that is slight resistance, but if we can break above there, then the $49 level gets targeted as the next ceiling $50 Level Remains Important

All of that being said, it's really not until we break above the $50 level that you can make an argument that the market has truly taken off to the upside. In that environment, I think we could go looking at the $54 level, but all things being equal, this is a market that has been overextended for quite a while, and the vicious sell-off that we had seen could very well signify a potential topping pattern.

That's especially true considering that the volume picked up so massively once we got to the top and, quite frankly, all of a sudden, nobody's talking about silver. That's somewhat impressive considering we are basically at the $48 level, which would have been a dream a year ago.

So, with that, I think we may be entering a pattern of consolidation while people try to determine whether or not these elevated levels make any sense. Ultimately, I think you need to watch that 50-day EMA and the $50 level for your next clue.

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