- Silver initially did try to rally during the trading session on Thursday to reach the crucial $32.35 level.
- The $32.35 level is an area that's been important multiple times in the past, as you can see on the chart.
- So probably not a huge surprise that we pulled back a bit.
That being said, I think part of the pullback had to go well beyond technical analysis and probably along the lines of the European Central Bank cutting rates for the EU, which was expected, but it sounds like they're going to cut again. Then the Swiss cutting by 50 basis points. That probably has sent some alarm bells into the markets, mainly under the premise of maybe the global economy is getting worse. And if that's going to be the case, then demand for silver, at least from an industrial side, is not going to look so hot.
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That Being Said
Now, you can't read too much into one day, and I don't necessarily think that there's anything particularly interesting about this candle by itself, other than it could be setting up a buy-on-the-dip opportunity. Between here and the $30 level, I expect to see a lot of support, but I need to see the market bounce a bit before I actually get involved. To the upside, if we were to break above that crucial $32.35 since level then silver has a real shot at going to $35.
But the problem with silver is it's one of the noisiest markets I can think of to trade. It's almost like crypto. Underneath, we have the trend line, the $30 level, and then eventually the 200-day EMA, all offering a bit of a hard floor on any significant pullback, so do keep those in mind. These areas could attract traders who think the selloff was a bit too much for the session.
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