Silver Price Forecast: Hovers Around 20-Day Support Amid Bearish Signals

Once again silver is flirting with potential support around the 20-Day MA. On Monday it fell to a new pullback low of 32.29 before finding support and bouncing intraday. Nonetheless, silver is in a precarious position technically as it closed below the 20-Day MA on Friday and will likely do so again today.

But it is not only the relationship to the 20-Day line that is of concern. The 50% retracement at 32.49 failed to retain support today and Friday the close was below it. Moreover, natural gas is also testing support around the internal uptrend line. Natural gas traded a little below it earlier today.

Next Lower Target is the 61.8% Retracement at 31.93

Natural gas traded briefly below the 20-Day MA on the prior test of test of the line earlier in October. It may do so again. The 61.8% Fibonacci retracement is a little lower at 31.93. If natural gas falls below today’s low of 32.29 it may head to the 61.8% price zone. A little lower is the 50-Day MA at 31.20. Also, keep an eye on the price zone around the most recent swing low at 30.12. It is part of the price structure of the uptrend that began from the August swing low, and therefore is potentially significant as a drop below it would violate the trend structure.

Downward Pressure Dominates

Although natural gas is in an area where it might see support that leads to a bullish reversal, there are no signs of it currently. Rather, there are additional short-term bearish signs. Notice the candlestick tail from Friday due to the close in the lower third of the day’s trading range. Today is set to leave a similar one-day bearish pattern. It shows sellers dominating trading activity in the later part of the trading session.

Short-term Strength Above 32.88

Once silver finds support in the pullback that leads to a bullish reversal, it can challenge the recent high of 34.87 and attempt to reach higher targets. For now, a rise above today’s high of 32.88 shows short-term strength and could be the beginning of an advance. A subsequent rise above Friday’s high of 33.12 will then show further strength.

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