Silver Price Forecast – Silver Tests the 50-Day EMA on Monday

NEW YORK (June 12) Silver has fallen a bit during the trading session on Monday, as we are now reaching toward the 50-Day EMA, just above the $24 level. By doing so, the market looks as if it is trying to figure out which direction it wants to go, either a significant selloff, or it will continue to look at the previous action as an attempt to turn the market around by bouncing from the 200-Day EMA.

A lot of this will come down to the US dollar, as there is a huge negative correlation between silver and the greenback. If we were to break above the top of the shooting star from the Friday session, that would obviously be a very bullish sign, opening up the possibility of a move toward the $25 level. Keep in mind that this week also features the Federal Reserve meeting on Wednesday, so that could be part of what we are seeing here, the market trying to sort out what the central bank is going to do. I think at this point in time, the 50-Day EMA could offer a little bit of support, but I think the $24 level is probably more important. Keep in mind also that the 200-Day EMA that we bounce from was the 50% Fibonacci level, so that all sorts itself out quite straightforward in technical analysis speak.

If we were to continue to fall from here and break down below the 200-Day EMA, I might be convinced that there is something bigger going on, but right now I still think this is just simply a pullback from the attempt to recover a couple of weeks ago. After all, markets cannot go in the same direction forever, so I do think that we have a situation where silver is just trying to build up enough momentum to get going. I like silver, but would probably wait for some type of supportive action or some type of balance to get involved to the upside. In general, it seems as if people are still worried about wealth preservation and silver is one of the ways they’ve been doing it over the last several months.

FXEmpire