Source: fxempire
Date: Feb 20, 2024
By: Christopher Lewis
The silver markets continue to look bullish at this point, as we have a few major levels making themselves known as we continue to see buyers on dips.
Silver Markets Technical Analysis
You can see that we have bounced a bit to save the 50 day EMA as support and as I record this, we are currently testing the 200 day EMA, which of course will capture a lot of attention. Above, we have a significant barrier in the form of $23.50, that is followed by $24.50 and then eventually $26. When you look at the action of silver over the last several years, the area between $22 and $26 has been an area of intense focus for the market. We have broken out of this area a couple of times, but in general, we’ve stayed in this general vicinity.
I think this is a market that continues to be “buy on the dip” and that does make a certain amount of sense considering that central banks around the world will be loosening monetary policy this year. Furthermore, you have to pay close attention to the US dollar, which has fallen a bit during the trading session so that does help silver as well. If we can break above the $23.50 level, then I think you’ll see people adding to positions, trying to push it to that crucial $24.50 level.
Short-term pullbacks offer buying opportunities, and the $22 level underneath, I think, is your hard floor in the market. You can even make out over the last, say, six weeks or so that we have formed a bit of a W pattern, which in and of itself will attract a lot of attention as it is a widely followed technical pattern. You should also pay attention to the 10-year yield in America. If it starts to drop, that will hold silver, and of course, gold which silver quite often will follow in and of itself. However, never forget that there is the industrial demand part of the equation as well, so silver can be a bit more volatile than gold as well at times because of this.
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