Silver Price Forecast: Reaches Support Yet Remains at Risk of Deeper Correction

Silver dips to a new retracement low to test support at 28.75, the low for the day. That price level was swing high resistance from May 2021. It was also an area of support in June during the retracement. Today, silver hit it exactly and then bounced. If strength from the bounce can hold into today’s close, silver will be on track to end today’s session with a bullish hammer candlestick pattern at a key support zone.

Today’s 28.75 Low Retests of Key Support

The key support zone begins with today’s low of 28.75 and goes down to the most recent swing low of 28.57. If the price of silver does not fall below 28.57 and stay there, the potential for a bullish reversal from the support zone exists. Otherwise, silver is at risk of a larger bearish correction from the May trend high of 32.52. Notice that the purple 20-Day MA has now crossed below the orange 50-Day MA for the first time since early-March.

Lower Swing High is a Concern

The June 11 swing high of 31.76 is a lower high than the May high. Once there is a lower swing high the potential for retracement below the 28.57 swing low exists as it sets up a potential ABCD correction as highlighted on the chart. An initial target from the pattern is at 27.81. However, extended targets are down at 26.74 and 25.37.

There are a couple additional price zones that can be watched for support on the way down. The 50% retracement is at 27.23 and the 61.8% Fibonacci retracement is at 25.98. However, the 61.8% price level takes on greater significance given the confluence with prior price structure. There is a May 2023 swing high at 26.14 and a December 2023 swing high at 25.91. Finally, the 200-Day MA is at 25.75. Together these price targets generate a potential support zone from 26.14 to 25.75.

Bounce Likely Tests 30.10 or Higher

If silver bounces from current support, the first sign of strength would be on a rally above today’s high of 29.43. That would put silver in a position to likely test resistance around the 20-Day and 50-Day lines. They are at 30.10 and 30.21, respectively.

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