By FXEmpire.com
The silver markets printed a hammer for the week over the last five sessions for the third time in a row. This is a massively supportive look to this market, but there are many reasons to be concerned if you are long of this metal.
For example, the industrial demand for silver is simply broken. Unlike gold, silver can be both a precious metal and an industrial one depending on what’s going on. There is a lot of speculation that since the May jobs number in America came out so low, there could be a rush to quantitative easing. This will certainly push the value of silver and precious metals higher. The fact is that there are many other countries out there that are about to start easing, so any move higher based upon the idea of quantitative easing could be short lived. The market does however look as though the short term could be higher.
A break above the candle for the week has us buying, but we see the $35 level as a potentially resistive area, one that will be tough to crack. If silver gets above that level, this market will go much, much higher in the end. However, there is a higher probability that the market simply continues to bounce around between the $27 and $35 levels for the longer-term. The market looks very consolidative on the longer term charts, so selling at this point is going to be very difficult.
The one thing that could have us selling at this point is the breaking below of the $27 level as it could easily open the way to the $20 mark. The highs had been getting lower until we got to fall last year, so it is easy to see how important the $27 to $35 area is. The breaking out of this area is what we are looking for to make trades for the long-term. A break above $30 has the market aiming for $35. A break below $27 has us selling and aiming for the $20 level.
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Originally posted here
