Silver Price Forecast: Eyeing Eight-Week Highs

Silver pushes up against resistance zone that once broken could propel prices higher. Last week seems to have completed a third test of support round the 21.93 price zone that was first tested on January 22. The subsequent rally off last week’s low of 21.93 busted through 23.33 resistance last week before closing above the level on Friday. Today, Monday, silver is set to complete as an inside day consolidation pattern.

Key Breakout Pivot at 23.53

The top of the developing bottoming structure is at 23.53, a seven-week high. A decisive rally above 23.53 triggers a bullish reversal from the bottoming pattern and it is confirmed on a daily close above there. Moreover, a double bottom pattern broke out last Friday on a rally above 23.33. A daily close above 23.53 confirms strength and increases the chance for a continuation higher. The 38.2% Fibonacci retracement was completed last week at 23.45. Other Fibonacci retracement levels are shown on chart but the next key target following a bottom breakout would be 24.61, the interim swing high from December 22 (C).

Strong Close Last Week

It is notable that last week ended with the highest weekly closing price in seven weeks. This is a sign of strength that is further confirmed on a rally above 23.53. The higher 23.53 price is being used as a level rather than the 23.33 double bottom breakout line as it is so close and provides an extra indication of strength. If there is follow-through to Friday’s advance silver will have a chance of testing prior highs from the past in a range from 25.91 to 26.14.

Initial Key Upside Target at 27.15

Further, last week’s low may complete a bottom that leads to a solid rally. The previous four rallies were from around 20% to 31%. If we assume that the current developing rally hits that middle of that range, silver could eventually see prices of 27.37. An interim target would be at the completion of a smaller and more immediate rising ABCD pattern at 27.15. Since it is the near-term pattern there is a good chance of it being reached relative to a larger pattern target.

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