On the monthly chart, silver has reached a very interesting technical level.
Just yesterday, I published an analysis explaining why I expected silver to move lower, with a downside target around $50. However, today I’ve taken one important factor into account that I underestimated yesterday.
Today is Fed Day.
We’ll get the Federal Reserve’s interest rate decision along with its policy statement, which will provide valuable insight into the future direction of U.S. monetary policy. This matters because if the market is going to stage a meaningful reversal, today is the perfect catalyst.
After taking another look at the monthly chart, I’m starting to believe that silver may not break lower after all. Instead, there’s a reasonable chance that this level could become a major turning point.
My reasoning is simple: I believe the negative impact of tighter monetary policy has already been largely priced in. If the Fed simply keeps rates unchanged and delivers a neutral message, that alone could be supportive for precious metals. If the statement is even slightly dovish—hinting at stable or eventually lower interest rates—the bullish reaction could be even stronger.
In my opinion, the probability of another meaningful tightening cycle is relatively low. Therefore, I think the odds favor a more positive outcome for today’s meeting.
Because of that, I’ve decided to close my short position and switch to a long position.
I’m giving this trade enough room to work. My stop-loss will be placed at 54.80, just below the previous swing low, representing roughly 4.5% risk from my entry.
If this support holds, I believe silver has the potential to move toward 64.50 as the first upside target. Beyond that, I see 73.75, 80, and eventually even 90 as possible longer-term objectives.
We’ll see how it plays out.
I’m fully aware that this isn’t necessarily the highest-probability setup, and I’m willing to give back part of my accumulated profits if I’m wrong. This is simply how I currently interpret the market.