Silver gapped higher to open the week, holding well above the $60 level that FXEmpire analyst Christopher Lewis treats as a potential floor. The move reflects traders pricing in the idea that the Federal Reserve may not hike rates as rapidly as once thought.
Silver gapped higher to start Monday's session, trading well above the $60 level as markets weigh the prospect that the Fed may not tighten as quickly as previously expected. FXEmpire analyst Christopher Lewis frames the $60 mark as a potential floor rather than a level to sell into.
Upside caps at the 200-day EMA
Should buyers keep stepping in on dips, Lewis expects market participants to eventually target the 200-day EMA at the $67.15 level. He sees that zone as difficult to break above and would look for exhaustion there.
That caution shapes his preferred approach. Rather than chasing the rally, he favors fading short-term moves that show signs of running out of steam.
Downside risk sits at $57
If the market breaks lower instead, Lewis points to the $57 level as the next area to watch. A move below there could open the door to a drop toward the $50 level, which he describes as a major zone going back multiple decades and likely to attract headlines.
For now, the $60 floor holds the line. As always in the silver market, Lewis stresses that traders should be cautious about the position size they use.
Source: FXEmpire
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