Silver Price Forecast: Tests Key Support, Potential Bullish Reversal Ahead

Silver further tested a support zone on Monday following last Thursday’s failed bullish breakout above the 50-Day MA and downtrend line. Today’s pullback took silver below Friday’s low briefly before finding support at 29.35. Key trend support of the 50-Day MA continues to be a critical support area. It is currently at 29.16. Despite being at risk of falling below the 50-Day MA, silver has managed to largely stay above it since the June 13 swing low of 28.66 ended an attempt to fall further below the line, at least temporarily.

Silver Sitting in Precarious Position

Silver is sitting in a precarious position on its chart and remains at risk of a deeper retracement. Although support has been holding, another sharp test of recent lows could see support broken and silver head to test lower potential support levels. Last week’s low of 28.93 is a key price level to watch. A decisive drop below that price triggers a weekly bearish signal. If triggered to the downside, the June 13 swing low is then more likely to be tested and possibly exceeded with lower prices being targeted.

Watch Trendlines

Recently, silver has seen either support or resistance near one of the trendlines positioned on the chart. The downtrend line was an area of resistance last week and the uptrend line showed support before then. Also, it marked a support area on Friday and is reflecting an area of support again today. The next lower support zone looks to be from around 29.16 to 28.30.

Breakout Above 30.85 Needed for Bulls

Given its current positioning on the chart, silver would need to get above last week’s high of 30.85 before giving a bullish signal. Until then, it can continue to be range bound if it doesn’t fall below and stay below the 50-Day MA. A subsequent daily close above 30.85 should lead to a test of the recent record high of 32.52, followed by a continuation higher. The next two higher targets would then be 33.17 and 33.80. You can see how 33.80 is part of a larger price zone that goes up to about 34.06.

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