Silver Price Forecast – Silver Continues to Rally on Softer US Dollar

NEW YORK (August 22) Silver continues to see upward pressure, as it looks like we are trying to reach toward the 50-Day EMA. The 50-Day EMA is closer to the $23.65 level, if we can break above there is likely that the market could go looking to the $24 level. Above that you have the $25 level which is the top of the overall consolidation area. Remember, silver is highly sensitive to the US dollar, as it has a huge negative correlation. If the US dollar continues to soften, it will drive the price of silver higher.

On the other hand, if the US dollar starts to turn things around and strengthen again, the market will then go looking to the downside in this market, reaching toward the $22.50 level, perhaps even down to the $22 level. If we were to break down below that level, it would open up a significant drop down to the $20 level, which of course is a large, round, psychologically significant figure and an area where we rallied from to kick off all of the positivity that we had seen.

All things being equal, I think this is a market that you need to be very cautious with, as the volatility is extraordinarily difficult in this market. The position sizing is crucial, and therefore you don’t want to jump “all in” into the silver market as it can be quite wild at times. Nonetheless, it does look like we are trying to get to the top of the overall consolidation range, and therefore I think we have a potential sizable run. However, if we were to break above the $25.50 level, then the market could go up to the $26.50 level where we had peaked during the month of May.

All things being equal, this is a market that continues to be noisy so therefore you have to be very cautious, and you also have to recognize that this is a situation where the currency crosswinds will continue to be a major thing to pay attention to, so remember not to trade silver in a vacuum, as it can be highly sensitive.

FXEmpire