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Silver Forecast: Silver Struggles at $31 Resistance, Stuck in a Range

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
  • Silver rallied a bit during the trading session on Wednesday to reach the $31 level but has turned around to show signs of exhaustion.
  • At this point in time, the $31 level, I think, remains a massive barrier.
  • This is an area that I've been talking about for quite some time.

The $31 level being a large round psychologically significant figure comes into the picture, but it's also an area where we've seen a lot of noise in the past. If we can break above that level, then the market is likely to go looking at the $32.35 level. This is an area that has been important more than once, so it is a situation where we will keep an eye on it.

Pulling Back Means Something

Silver Forecast Today 30/01: Stuck in a Range (graph)

Pulling back the way we have suggests that traders believe that the Federal Reserve will probably be fairly tight for a while. The fact that they chose to do nothing, and the statement is somewhat hawkish. It's possible that we may not see rate cuts at all this year and that would be negative for silver, at least in theory. All things being equal, I think this is a market that is still just simply stuck in a range. And as long as that is going to be the case, if you're a short-term back and forth type of trader, it could work out for you. But if and when we break above that $31 level, you have to assume that we are going to go higher. If we break down below the 200-day EMA, then we start to set our sights on the $28.75 level, which is where we just formed a major double bottom. That being broken to the downside probably sends silver plummeting. At this point though, I think we're just looking at a lot of sideways grind.

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Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

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