Silver markets have fallen a bit during the course of the trading session on Tuesday to show signs of resistance at the $23 level again. This is an area that has been important more than once, and therefore it is worth noting that the area remains important, and if we can break above the $23 level, then it would be a good sign for the market to go looking towards the 50 day EMA.
SILVER Video 06.10.21
If we break down below the lows of the trading session on Monday and Tuesday, then I think the market goes looking towards the $22 level, and then possibly even down to the most recent low just below there. Breaking down below that level then opens up the possibility of a move down to the $20 level, which is a large, round, psychologically significant figure.
Make sure you pay close attention to the fact that the US dollar has a strong negative correlation to this market, so if the US dollar continues to strengthen, and perhaps even more importantly the 10 year yield, that will weigh upon the silver market. The market will continue to be driven by these influences, because quite frankly we have seen a lot of commodities sell off in general. With that being the case, I think the markets will continue to be driven to the downside longer-term, but if we were to rip to the upside, taking out the $24 level will be necessary to enter a longer-term “buy-and-hold” type of scenario. I think at this point in time we are more likely to see selling pressure than buying pressure.
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This article was originally posted on FX Empire