- The silver market continues to see a lot of volatility as we have plunged yet again during the Thursday session, mainly due to the fact that the Federal Reserve is expected to stay tight for longer than anticipated.
- This is something that brings in a lot of strength when it comes to the US dollar, and of course silver has a major negative correlation to that asset.
Technical Analysis
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The technical analysis for this pair is starting to shift quite drastically, as it had been very strong, but now we are starting to ask questions about the previous consolidation region that was very important. That being said, I think we have a situation where if we break down below the $35.75 level, the silver uptrend could be over rather rapidly. Keep in mind that the jobs number comes out on Friday, and that will more likely than not cause quite a bit of volatility in the US dollar, and this would obviously have a major influence on this market.
We currently reside near the 50 Day EMA, and that of course attracts a lot of attention in and of itself, and we have bounce from the very lows of the day, but you should also keep in mind that the market absolutely cratered right away, so that suggests to me that the market is likely to continue to see a lot of questions asked of whether or not we can continue to fall, but I suspect by the end of the Friday session we probably have a better idea of where things are going. With this, I think we have a situation where you will have to be very cautious over the next 24 hours, but by the time we head home for the weekend, we should have a better idea as to where the US dollar is going, and then by extension the silver market itself. We are on the precipice of something big, but the direction still isn’t known. I would not be a buyer of silver until we break above the gap that started this morning, which would be roughly near the $37.80 level above.
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