Silver Price Forecast – Silver Explodes to the Upside

Silver Markets Technical Analysis

Silver has exploded to the upside during the trading session on Monday, as we have seen interest rates around the world drop, specifically in the United States. This helps precious metals, and of course puts a bit of negative pressure on the US dollar. The move is based upon the regulators in the United States coming into bailout the now failed Silicon Valley Bank. At this point, traders are betting that the Federal Reserve is going to have to start easing its monetary policy and are doing everything they can to bully the Federal Reserve in the interest rate markets.

At this point, traders are trying to price in interest rate cuts, as the Federal Reserve will have to come in and bail everybody out. Quite frankly, I don’t think we are at that point yet, and therefore this is setting up for a potential vicious move to the downside. I certainly wouldn’t get in front of this, but we are approaching the 200-Day EMA and the 50-Day EMA, and that will more likely than not offer a bit of resistance, especially as there is a gap in that same general vicinity.

Looking at this chart, we bounced significantly from the 61.8% Fibonacci level, which is a very good sign from a technical analysis standpoint, but quite frankly the move on Monday is a bit overdone. The last thing you want to do right now is chase this market at this point and start buying here. If you already own silver, then you may want to start taking a little bit of profit, regardless of what happens next.

If we do break above the $22.50 level, then it opens up the possibility of a move all the way to the $24 level. That is where the selloff started previously, and therefore it does make a certain amount of sense that we would see resistance and trouble in that area. That being said, I’m not going to start selling this market until I see some type of exhaustion candlestick. At the same time, I certainly would not be chasing silver all the way up here, because silver of course is extraordinarily volatile under the best of circumstances.

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