- Silver has exploded to the upside after the CPI numbers in the United States came in a little lighter than anticipated.
- We have now broken above the $30 level, and I think $30 is a major area of interest in this pair.
- That being said, you also have to keep in mind that the FOMC is coming out and that of course causes a bit of volatility as well.
So, while in the short term, it certainly looks like we are going to try to go to the upside. The reality is that short-term pullbacks will be common, I think at this point. I also believe that you have to pay close attention to the FOMC press conference later in the day. So, if we do break above the $30 level, we stay above there at the close of the session, then it's likely that we continue the longer-term uptrend.
Top Forex Brokers
Jerome Powell and Press Conference
If Jerome Powell does something to crush risk appetite later in the day, we could find ourselves testing the $29 level again. Underneath there, we have the 50 day EMA offering support between $29 and the crucial $28.50 level, which was previous resistance, and a certain amount of market memory should come into the picture at that point.
Keep in mind, this is a market that is extraordinarily volatile, so you need to be very cautious with your position sizing. Silver has wiped out several traders over the years, and therefore you have to be exceptionally careful in this market with your size. Position sizing is crucial in this market, as it is a situation where traders tend to be very fickle. Furthermore, this is a market that features large futures contracts, and the CFD market will mimic this fact. This means that traders are more likely to get out of a position quickly if they feel like they need to.
Also, remember that the silver market is highly sensitive to not only interest rate, but also industrial demand. The geopolitical issues can have an effect, but at the end of the day, the market isn’t as sensitive to it in the same way gold is.
Ready to trade our daily Forex forecast? Here’s a list of some of the Top Silver Trading Brokers to choose from.