By FXEmpire.com
The silver markets fell for much of the week over the last five sessions. The metal is suffering right along with its yellow cousin gold, but also has had a bit of industrial demand destruction wearing on it as well. The market has not only the factor of the “anti-Dollar” play, but it also has to take into account the idea of industrial demand. With the economy looking to cool globally, the demand for silver by industry could be a massive negative for this market.
The candle for the week is a hammer, and it is sitting right on the $25 – $26 level. The area is supportive as history has shown, and as a result there is a real chance of a bounce from here. The highs in this market are getting lower, and there is also the possibility of a descending triangle in this pair. If that is the case, there is a real chance for a massive meltdown. The reality is that the $25 level is a massive point in the marketplace.
The level absolutely has to hold if you wish to buy silver. While the silver markets have been good to those who have been long over the last decade or so, the last 12 months have been a messy affair at best. The possibility of a bounce from this level exists, but this could very likely be a simple rally from which to sell.
With most currencies getting pummeled against the US dollar at the moment, there is a real “risk off “attitude out there. In this type of environment, there is going to be serious downward pressure on all risk assets, and silver is especially vulnerable as it is not only a precious metal, but an industrial one as well. Add to this the idea that the market is a thinner one than gold, and you have real potential for a strong fall in this market. We are fading rallies until the top of the triangle gets broken. We simply sell sub-$25, or we fade weak daily candles.
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Originally posted here
