Silver markets have fallen significantly during the course of the week to reach down towards the $22.50 level. This is an area that has been supportive more than once, extending down to the $22 level. Beyond that, we have a lot of questions when it comes to the US dollar. After all, the US dollar has a major negative correlation to the silver market, as the market itself is priced in those very same dollars.
SILVER Video 20.09.21
If we were to break down below the $22 level, I think we probably make a bit of a beeline to the $20 level, maybe even down to the $19 level after that. That being said, if we were to turn around and rally from here, I think that the $24 level is a major resistance barrier. The silver markets are starting to face serious headwinds, so if the US dollar continues to strengthen, it is likely that we show signs of serious detriment. However, if the greenback get sold off then silver looks cheap. I think ultimately this also comes down to the possibility of industrial demand, which is all over the place as supply chains break down around the world.
One thing is for sure, this area just below has been supportive for a while, and therefore I think a lot of attention needs to be paid to this market. We may be getting ready to make a bigger decision, one that I plan on capitalizing on with a huge position. That being said, I need to let the market tell me which direction we are going to break over the longer term.
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This article was originally posted on FX Empire