Silver Price Forecast – Silver Continues to Look For Support

Silver Markets Technical Analysis

Silver has fallen a bit in the early hours on Wednesday as we wait for the FOMC results. The interest rates are expected to be cut by 25 basis points in the United States, but the real question now is going to be, how does the central bank sound going forward? Are they going to be hawkish or dovish? The Fed funds futures rate market is suggesting that there’s about an 80% chance that the Federal Reserve sits still in January, which higher rates does tend to cause a little bit of an issue for metals.

That being said, central banks around the world are cutting rates in general, so what you’ll probably end up seeing is precious metals moving higher against other currencies, not the US dollar as much. That doesn’t mean that we can’t rise here, it’s just that it might be a little bit more of a fight back and forth to the upside. We are approaching a very significant support region right around the $30 level, which of course has been important support and resistance multiple times over the last several months, but it’s also a large round psychologically significant figure and right between the 50 day EMA and the 200 day EMA indicators, which typically is an area that you start to see a lot of volatility and you will eventually see the market escape from.

Furthermore, we also have a trend line right there as well. So, it all ties together for it being a very difficult market to break down. However, if we were to break down below the $29.70 level, then you can make a strong argument for a head and shoulders pattern kicking off, perhaps opening up the possibility of a drop down to $25. So, pay close attention.

For a look at all of today’s economic events, check out our economic calendar.