Silver Price Forecast: Bearish Pullback Could Extend Toward 50-Day MA

Silver traded in a relatively narrow range on Monday and within Friday’s trading range. Friday’s decline to a low of $32.66 completed a 61.8% Fibonacci retracement of an internal upswing and successfully tested support at the 20-Day MA. When two or more indicators identify a similar price level on the way down there is a good chance that signs of support will be seen, at least on first approach. Monday’s high reached $33.31, and the low for the day was $32.89 at the time of this writing. Trading continues near the lows of the day, and it looks like silver may close Monday’s session in a relatively bearish position, in the lower third of the day’s trading range, if not lower.

Below $32.66 is 50-Day MA at $32.01

If the price of silver continues below last week’s low of $32.66, a breakdown below the 20-Day MA will have triggered, opening the possibility of an eventual test of support around the 50-Day MA, currently at $32.01. Other price levels to watch for possible support include the 50% retracement at $32.53. However, 61.8% Fibonacci retracement of the full upswing beginning from a February 28 swing low, is at $32.12. Also, since the 50-Day MA is rising and may soon converge and rise above the 61.8% retracement.

Channel Shows Inclination Towards Lower Prices

The rising parallel trend channel that is highlighted on the chart illustrates the potential for an eventual test of support near the lower trendline of the channel. Notice that the top channel line marked an area of resistance during several attempts to break out above the channel. Most recently the rally to a $34.24 trend high was a failed bullish breakout attempt. This means that there is a chance the bearish pullback will continue, and possibility till approaching the lower trendline of the rising channel. But whether it does so or not the inclination may be to move towards the lower boundary of the channel.

Bull Trend Intact Above 50-Day MA

Nonetheless, the advance from the $28.75 swing low in December may be in its early stages when considering the 50-Day MA as an indicator of the rising trend. The 50-Day line was reclaimed on January 29, and it was successfully tested as support in late-February. That low was followed by a continuation of the bull trend with a higher swing high last week.

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