Silver has been moving up and down the charts, but mostly down over the last couple of months, and if you have been reading my articles I have been talking a lot about this as of late.
Why has silver been on the move lower? Well, for one, it’s not just a shiny piece of metal, it’s also a thermometer of global tension, and while there has been a fair bit in the last couple of months it has certainly started to ease off quite heavily.
Take a quick look overseas, and we have Ukrainian forces starting to win the war against the rebels; while in Iraq, we have seen ISIS pushed back by the Kurds as American air power starts to flex its muscle in order to control the situation.
So, with global tensions easing we have seen a rapid fall in silver, one can easily think that it may continue, but in global markets there is always some sort of storm on the horizon. The question is, will it hit home, or will it just move on past.
Silver's fall has so far been relatively steady as it climbs down in a bearish channel. What it’s now about to find is heavy liquidity in the market and a point for the market to turn. Between 19.50-19.00 the market starts to find a lot of momentum and it’s likely we will see markets watching for this key support area to kick in and push upwards.
If you’re looking to catch a bullish movement higher, then this will be the point to aim for. What will have to happen though for the bulls to come into the market is to see pressure on the trend line and a complete breakthrough. With this in mind, I would target anything above the 19.87 resistance level, which is in play - just to be sure that it’s not a false breakout.
With all this downward pressure, it’s easy to forget that long term market expectations are for a rise as seen in the chart below. While many will say this is a very long term outlook, this is still the market view, and it’s unlikely to change in the near term as silver still has economic value in industrial applications as well as a host of other applications.
So, with all the noise in the silver market at present, keep an eye on the support levels and range in play, as silver could turn very quickly if markets feel that it has done its dash. The only thing is to make sure it’s confirmed and not get trapped in the initial breakout phase.