Silver markets have initially fallen during the trading session on Tuesday but then turned around to show signs of life again. Because of this, it looks as if the market is trying to find a little bit of support near the $23.50 level, but quite frankly we have broken down quite a bit over the last several months and therefore one has to wonder whether or not this will actually stick?
SILVER Video 15.09.21
If we were to break down below the lows of the Monday session it more than likely will open up a move down to the $23 level. The $23 level would obviously be a large, round, psychologically significant figure, so a lot of people would be paying close attention to it. If we were to somehow break down below there it would open up a bit of a “trapdoor” in this market to send it much lower.
On the other hand, if we can retake the $24 level, it is likely that we go looking towards the 50 day EMA above, an area that has been important more than once, and would obviously attract quite a bit of attention. The market will continue to be noisy regardless, so I think what we are seeing here is a potential opportunity to trade back and forth and what will be highly volatile markets. Keep in mind that silver markets are much thinner than gold markets, so they do tend to have very erratic moves at times. Because of this, you need to keep your position size relatively reasonable, because you may have sudden moves that could cause a lot of damage to your account.
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This article was originally posted on FX Empire