Silver Price Forecast: Strengthens After Pullback, Eyes Break Above $34.08

Silver dropped below Friday’s low of $33.53 on Monday before finding support at $33.43 and bouncing intraday. Despite the early signs of a possible bearish reversal, silver instead is showing strength heading into the final period of the day. It looks likely to close strong, near the highs of the day, but also with a bullish hammer candlestick pattern or a doji hammer. Nonetheless, a decisive rally above today’s high of $33.90 (currently) could trigger a continuation of the bullish advance.

Resistance at Top of Rising Channel

Resistance was seen at a trend high of $34.08 on Friday prior to Monday’s pullback. Notice that resistance was seen around the top trendline line of a rising parallel trend channel. Since the line is rising, potential resistance around the line is also rising. This means that last Friday’s high of $34.08 could be busted to the upside and resistance may continue to be seen around the top channel line. Other possible resistance levels may be where two trendline cross around $34.44, followed by the completion of an initial target for a rising ABCD pattern at $34.60.

Highest Weekly Closing Price Since 2012!

Silver had its highest weekly closing price since November 2012 last week! It followed a new trend high of $34.08 for the upswing starting from December’s swing low on Friday. This was a long-term bullish signal and shows improving underlying demand for natural gas. Therefore, traders and investors will be watching for bullish signals during periods of weakness to take advantage of the strengthening long-term trend. In addition, if silver ends the month in a relatively strong position, it has a chance to establish its highest monthly closing price since 2011.

Potential Support on Weakness at $32.77

Nevertheless, if resistance continues to be seen around the top of the rising channel pattern, a pullback to test support levels may come before a decisive rally to new trend highs that might be sustainable. Potential support around the 20-Day MA, now at $32.53, deserves attention. Also, the prior interim swing high at $32.77 from two weeks ago could see support as well. As long as support remains above the recent interim swing low $31.81 silver retains a near-term bullish outlook.

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