Silver’s Resurgence: Breaking Barriers, Aiming for 78.6% Fibonacci Level

Silver Forecast Video for 31.10.23 by Bruce Powers

Silver rallied back above its 200-Day EMA today after trading largely below it for the past four days. Today’s bullish price action started with an inside day breakout that saw silver reach a high of 23.59 as it looks to test the recent trend high of 23.68. A continuation of the uptrend should be next with a rally above that prior trend high.

Strong Close Will Confirm Strength

This is the first day since a minor correction began following the 23.68 peak that silver is showing strength that should lead to a new trend high. Further, it is on track to confirm strength today with the highest daily close since the October bottom. The highest daily close for the rally is from October 20 at 23.29. Also, the weekly chart confirms strength. Today’s advance triggered an upside breakout of an inside week as well as an inside day. Last week’s high was 23.32.

78.6% Fibonacci retracement at 24.07 is Next in Line

The next higher target for silver looks to be around the 78.6% Fibonacci retracement at 24.07. For the remainder of this week, the 78.6% retracement level converges around the higher declining channel line (orange dash). A daily close above the top line will provide a new sign of strength as silver needs to first break out of the declining trend channel before it can get higher.

Two Higher Target Zones Prior to New Highs

Subsequently, there are two initial target zones on the way up. Each is anchored by swing highs and lows, which match weekly highs and lows. The first is identified from around 24.47 to 24.62. It includes the 23.6% Fibonacci retracement at 24.56. Next higher is a range from around 25.0 to 25.25. A daily close above 25.25 completes a reversal off the bottom as the two swing highs that make up the declining trend channel will be exceeded to the upside. That higher range creates a vertical resistance zone that is more powerful when broken relative and the breakout of an angled line.

Silver Back Above Long Term Trendline

You can see how the long-term downtrend line (thicker blue) cuts through the middle of the multi month consolidation phase of the last few months. An initial upside breakout above the line first triggered on April 4. Subsequently, overhead supply picked up leading to a correction that likely bottomed out this month. The current rally should be more successful in rising above the long-term trendline and continuing higher.

For a look at all of today’s economic events, check out our economic calendar.