Silver markets have rallied most of the week, and are closing the top of the candlestick. This is a very strong sign considering that we had formed a hammer during the previous week at what has been a major support level over the longer term. Because of this, think we are going to continue to see a bit of a bounce in this market but I also would point out that the liquidity is going to be an issue this time year. In other words, do not get too aggressive with your position size, because sudden moves could cause problems.
SILVER Video 27.12.21
Underneath, the 200 week EMA sits at the $21.16 level, and is currently offering a “floor the market.” I think that the market has proven itself a couple of times in the last few months to be stable to handle these pullbacks, so therefore I do think that we probably continue to grind higher, perhaps even as high as $25 over the bulk of the move. This does not necessarily mean that it has to happen quickly just that I think that is where we end up eventually.
Pay attention to the US Dollar Index, it can have a huge negative correlation to silver, so if the US dollar starts to get too strong, that can work against your silver trade, and of course vice versa. If the dollar starts to weaken, that generally makes things like silver get a bit of a boost. Either way, it looks like we are definitely going to be bouncing if nothing else.
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This article was originally posted on FX Empire
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