Silver Price Forecast: Advance Stalls Near Trendline Resistance

Silver pulled back from last week’s 31.43 high on Monday triggering a down day with a lower daily high of 31.19 and a lower daily low of 30.36. It remains within a six-day consolidation zone that has been attempting to breakout above a downtrend line.

Friday’s price action signaled a breakout as the day was fully contained above the trendline with the low for the day at 30.73. That was a successful test of support at the line and the day ended strong, in the top third of the day’s trading range. Now, there needs to be bullish follow-through to further confirm the attempted breakout.

Stalls at Trendline

Last week’s high hit an initial target for a rising ABCD pattern (purple) and that seems to have stopped the ascent for now. If the pullback continues there are several price levels to watch for possible support. The 38.2% Fibonacci retracement is at 29.56 and it is very close to the 20-Day MA at 29.46. A little lower is the 61.8% Fibonacci retracement at 29.12, along with the 50-Day MA at 28.98.

Upside Breakout Remains a Possibility

During the most recent retracement silver found support at 26.47. It was followed by a rally and a higher swing high. That low successfully test support around the 200-Day MA, which was at 26.08. It was the first time that the 200-Day line was tested as support since silver rallied back above it March 4. The subsequent higher swing low signals strength from that low and further still on last week’s breakout. Moreover, Therefore, further attempts to break higher, above the trendline, are likely.

Bull Signal Above 31.41

A decisive rally above last week’s high of 31.41 triggers a continuation of the advance with silver then looking to recapture the 31.755 interim swing high from July 11. That is also the highest price for July. Subsequently, the price area around the recent swing high of 31.52 will be on the agenda. Further up is a target zone around 32.34 to 31.42, consisting of two Fibonacci price levels. It includes the 127.2% extended target for the rising ABCD pattern that completed an initial target at last week’s high.

The monthly chart also supports an eventual resolution to the upside as a bullish reversal was triggered earlier this month on a rally above the 30.19 August high. It followed three months down.

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