After the long bearish ride in the silver, the initial bottom is formed near the critical support level at 16.09.The professional silver trader made a decent profit by riding the long bearish rally in the market. The global market has been facing an extreme level of uncertainty in the recent days and trading CFD has become extremely difficult as the investors don’t have any clear clue regarding the next movement of the mighty U.S dollar. The U.S dollar index has fallen sharply in the ground after Mr. Trump failed to keep his promise regarding fiscal spending and tax cut policy.
Technical analysis of silver in the 4 hour time frame
Figure: Silver heading towards the 17.35 level in the 4 hour time frame
From the above figure you can clearly see that the price has bottomed near 16.09 mark and after that, it has started its correction. The price has nicely retraced back above the 38.2 percent Fibonacci retracement level and now currently heading towards the 50 percent retracement level. The professional traders have been trading CFD with an extreme level of caution nowadays since the price of a commodity is now showing wild momentum in the market very often. However, the investors are not staying on the sideline rather they are making the best possible trade in the volatile market.
U.S economic conditions: The performance of the U.S economy is not that great in recent days as most of the leading investors are in doubt regarding the next movement of the green bucks. The green bucks have lost most of its bullish strength in the global market after Mr. Trump failed to keep his promise regarding the increase of fiscal spending and tax cut policy. According to the leading economist, the green bucks might face an extreme level of bearish pressure in the upcoming days as Mr. Trump administration has done very little for the welfare of the U.S economy and made trading CFD extremely difficult. The U.S dollar index which is the overall value of the green buck’s strength in the global market has dropped from its 14 years high in the global market and allowed the price of silver to rally higher. Despite such weak performance from the U.S economy, the optimistic dollar bulls are still in hope that the green bucks will be back again to its former glory upon the interest rate hike decision made by FED chairperson Janet Yellen.
Expectations in market movements: Though the price of silver is rallying higher with a strong bullish momentum in the global market most of the leading investors are thinking that the price will ultimately cap down by the 50 percent Fibonacci retracement level drawn on the daily chart. Moreover, the price has started showing exhaustion candle in the daily time frame which is a very clear indication that the bulls are running out of steam in the global market. Though the overall sentiment for the price of silver remains extremely bearish at the current moment a clear break of the 61.8 percent Fibonacci retracement level will confirm the initial bottom formation in the long term bearish trend in the market. To be precise this will inaugurate the fresh bullish trend in the price of silver which will ultimately dominate the market for at least couple of weeks.
Summary: The price of silver is now trading near a critical zone and the professional traders are cautiously waiting to short the silver to trade in favor of the long-term trend in the market. Though the market is exhibiting a tempting short opportunity the traders should be extremely careful since it might even start a fresh bullish trend in the upcoming weeks. So make sure when you execute the trades in the market you follow proper risk management factors to save your trading capital.