- Silver has significantly dropped during the early hours on Wednesday as we continue to see a lot of noise out there.
- I think at this point, we need to pay close attention to the idea that most of this is probably position squaring heading into the FOMC meeting.
- Later on Wednesday, we had an interest rate decision coming out of the Federal Reserve.
That is normally a very noisy and volatile time of the market. Most traders will be willing to take advantage of their gains and simply cash them out heading into this event. But whether or not this actually changes the trajectory of silver is a completely different question altogether. We are currently digging into the body of a bullish flag that had formed. And I think a lot of people will continue to look at this as a market that remains bullish regardless. It's not until we break down below the $40 level that I would be concerned about the overall trend, especially with the 50 day EMA racing toward that $40 level.
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To the upside, if we can break above the $43.50 level, then it opens up a move to the $45 level. But I think you've got a situation where right now traders are probably more or less going to be a bit noisy. I think you're going to have a big fight on your hands. But once we get through the statement, especially if it's very dovish, and of course the press conference being the same, then silver probably takes off. If the Federal Reserve is a little bit more hawkish than anticipated, that might dampen the rally, but there are other reasons for Silver to be going higher and continue the overall trend.
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