The Friday session was a bit of a mess on Friday, as we continue to see the assets plunge in value. At this point, we need to look at $28.50 as a potential floor in the market. Ultiamtely, this is a market that is at a major crossroads. The next few days are crucial.
Silver plunged during the course of the trading session on Friday as it looks like we are struggling to find our footing. At this point, we are more likely than not going to be testing the $28.50 level, which is an area that previously had been supported, an area that I think not only has shown a lot of resistance and support, but also is probably backed up by a lot of options trading. If the market were to turn back around and show signs of life, this could be an excellent entry, but it looks at this point in time, like traders are dumping precious metals.
This is a very ugly turn of events so before you get involved you need to see the market react positively to the $28.50 level. Some type of bounce and follow through on a shorter term chart is probably what I’ll look for but quite frankly to jump into this before the weekend is a bit dangerous so what I’m hoping to see is some type of bounce during the day on Friday, and then a little bit of follow through on Monday to take advantage of.
Silver is a very volatile market, and therefore you need to be very cautious with your position sizing as usual. If we were to break down below the $28 level, at that point in time, things could get rather rough and negative, and we could go looking towards the 200 day EMA.
For a look at all of today’s economic events, check out our economic calendar.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.