A key resistance zone from $92.87 to $99.66 is likely to cap any upside.
Even without considering other resistance levels, I think that any potential gains are likely to be constrained by the main retracement zone of $92.87 to $99.66. I’ve actually been looking for the market to reach this range for about two weeks now, yet there hasn’t been sufficient speculative buying to generate the bullish momentum needed. This situation probably results from exchanges raising futures margins several times a month.
50-day moving average is a stopper – are big sellers waiting to buy cheap?
What’s crucial here is the 50-day moving average. If this level can’t be surpassed, it indicates there’s a barrier in place. It could be a short seller or someone with enough clout to inhibit buyers from pushing prices higher, just so they can acquire assets at a lower price.
Bearish scenario: below $71.98 opens door to $64.06 and even $52.09
Considering the idea of a big seller looking to buy at lower prices, how might this unfold? First, it’s necessary to keep the 50-day moving average from breaking out. The next critical support level lies at $71.98. Without additional support until we reach the February 6th low of $64.06, it’s possible to see a significant drop. This downturn could be triggered by a negative announcement regarding the PCE index on Friday or a strong rise in the US dollar, which makes silver less appealing to international traders.
If peace breaks out, the war premium can disappear quickly.
Additionally, if discussions around military tensions between the US and Iran lead to price increases, this temporary “war premium” could vanish almost instantly if peace is suddenly established in the Middle East. This would likely bring us back to $71.98, which, although a starting point for a potential rally, could also become a trigger to accelerate the decline.
I’m leaning towards a bearish outlook in the near future. If this trend intensifies, prices could even fall to the 200-day moving average around $52.09, which serves as a point of support and value.
Bullish Scenario: Breaks above 50-day moving average targets of $92.87 to $99.66
The 50-day moving average will be pivotal in determining whether a breakout occurs. A sustained movement above this level could spark an upswing through important resistance points at $86.32 and $92.20, with the ultimate target remaining the range of $92.87 to $99.66.
