Silver Price Forecast: Bearish Setup Points to 27.31

Silver remained stalled on Monday around resistance at the 20-Day and 50-Day MAs, and support around the 61.8% Fibonacci retracement. It has been trading within a range between those indicators for five days. The specific high of the range is 29.18 and the low is 27.69. The low was again tested as support today as the low of the today was 27.70.

Descending ABCD Pattern in Play

Last week’s swing high was 29.18 and it generated a lower swing low and therefore set up a potential descending ABCD pattern. It signals a bearish continuation with a drop below last week’s low of 27.69. Once price symmetry is completed between the AB and CD legs of the pattern, the potential for a pullback increases. Also, the target identifies a potential significant pivot, where a breakthrough may be consequential and will likely lead to the next lower support zone.

Recent Price Behavior is Short-term Bearish

If the 27.69 price level fails to hold as support, the next lower target will be the initial completion of the ABCD pattern at 27.31. In addition to that pattern setup, silver found resistance at the 50-Day MA during last week’s swing high. That swing was a confirmation of resistance of the 50-Day line that was previously showed support until August 30, when silver fell back below the line.

This type of price behavior, prior support becomes resistance, is typical of a developing bearish trend. The 27.91 target is strengthened by the 78.6% retracement, which is close by at 27.27. Also, be visually aware of the internal uptrend line that also represents possible support on the way down.

200-Day MA at 26.67 Presents Critical Support

Lower down is the 200-Day MA at 26.67 along with Fibonacci confluence. Together, these indicators generate a price zone from 26.81 to 26.67 that can be watched for support is silver keeps falling. A successful test of the 200-Day line as support could be critical for the larger developing advance in silver. A test of support during the current pullback would be the first test of the line as support since silver broke out above it on March 4. Since silver is so close now, it seems possible it may be tested before the bulls take back control.

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