Silver Price Forecast: Holds 50-Day Support, Eyes Breakout Above $33.18

Silver continues to hold above support at the 50-Day MA and trendline. Another successful test of the 50-Day line completed today on an initial dip, before buyers took back control and prices rallied. At the time of this writing, silver continues to trade near the highs of the day at $33.18 and it looks likely to complete a bullish hammer candlestick pattern today. Since the hammer occurs on support of the 50-Day MA, it deserves attention. The low for the day was $32.66 and the 50-Day MA is at $32.65.

Improving Demand

Short term bullish signs are improving. The rejection of price from the 50-Day line provides a sign that the near-term uptrend may be getting close to continuing. It shows prior resistance represented by the 50-Day MA having been successfully tested as support. Also, notice that Monday’s trading range was fully above the 50-Day line for the first time since the line failed as support during the sharp drop in early April. In addition, the day’s low may provide an important support level once the day’s high is exceeded.

One Day Bullish Reversal Likely

If a bullish breakout signals with an advance above Monday’s high of $33.18, there is a chance that silver may test the recent highs around $33.70 and may keep rising. The 88.6% Fibonacci retracement level is at $33.87, while an interim prior swing high at $34.24. Either price area could see signs of resistance. Then, of course, there is the recent trend high of $34.58, followed by the slightly higher trend high at $34.87.

Silver has rallied aggressively since the $28.32 spike bottom was established in early April. As of the $33.70 high the price of silver had risen by $5.38 or 19.0% off that bottom. Nonetheless, today’s bullish price action shows that buyers remain in charge. How long they may remain in charge overall remains to be seen.

Further Weakness Indicated Below $32.66

On the downside, the 50-Day MA and Monday’s low of $32.66 mark key support. A drop below that price level would show weakness, especially when followed by new signs of strength as seen today. The next key lower level would then be around three recent daily lows of $32.08 and another rising trendline. But since the 200-Day MA and 50% retracement converge around $31.00, that price zone would need to be considered as a potential downside target.

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