Silver Price Forecast: Breakout Above Key Resistance Confirms Bullish Momentum

Silver continued to show strength on Monday as it rallied above the 50-Day MA and is poised to close strong, above that price level. That would confirm the breakout. A strong daily close for silver will set the stage for a continuation higher. Also, the rally today took silver above the interim swing high of 29.23 from August 2, providing an additional signal of strength. Monday’s advance reached a high of 29.47, a little shy of the 61.8% Fibonacci retracement target at 29.74. It points to the next higher target zone.

Up 11.3% From Recent Low

Nonetheless, silver was up by as much as 11.3% in the seven days since rallying off the 26.47 swing low. The swing low also completed a successful test of support around the 200-Day MA, which was a little lower at 26.08. That was the first test of support around the 200-Day line since silver rallied above the line in early-March, leading to a strong multi-week advance. Therefore, the expectation is that that correction is done.

Watch for Support at 20-Day MA on Weakness

Regardless, short-term weakness may occur at any moment as today is the third straight day up. If a pullback occurs, watch for support first around the 50-Day line at 29.20. Then there is the 20-Day MA at a price of 28.11. Notice that it was tested as support on Friday with the low of the day. A rising ABCD pattern has been added to the chart (purple) from the recent swing low (A). Initial targets have already been exceeded, leaving a 161.8% extended target at 29.74. That is a match with the 61.8% retracement and therefore highlights the potential for a strong pivot in that price area.

Bullish Weekly Signal in Play

Silver triggered a bullish reversal on its weekly chart last week and today’s advance validates the breakout. This provides one more piece of evidence for the likely continuation of the developing bull trend. Keep in mind that last week was the first week of a weekly bullish signal. So, the rally may still be in the beginning of its early stages that eventually should lead to an advance above the most recent trend high of 32.52 from May.

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