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Silver markets have rallied a bit during the course of the week to show signs of strength again as we continue to see a lot of noisy behavior. Quite frankly, this is a market that I think given enough time will have to make up its mind but right now it does not seem to be necessarily concerned about it. Because of this, I think it is probably a situation where we could be trying to carve out a range for shorter-term traders, with the $22 level underneath kicking off significant support that extends all the way down to the $21.50 level.
SILVER Video 17.01.22
On the other hand, the $23.50 level above offers significant resistance, which we have seen tested three times in a row on the weekly chart. Once we break out of one of these ranges, then we can get some type of situation where we can decide whether or not we are going to have a bigger move, which to the upside could be as high as $25. To the downside, if we break down it is very likely we could go looking towards the $20 level.
All things being equal, this is a market that I think continues to see a lot of volatility, and of course negative correlation to the US dollar. Because of this, you need to pay close attention to the US Dollar Index, and what it is doing. Quite frankly, it just trades in the opposite direction most of the time and that something you need to keep in the back of your mind.
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This article was originally posted on FX Empire