Silver Price Analysis: Rally, Breakout, or Potential Retracement?

Silver Forecast Video for 18.07.23 by Bruce Powers

Following a sharp two-day rally last week, silver has stalled out as it rests following a sharp rally last week. It is now set to complete a second relatively narrow range day near the trend high of 24.66. That rally last week put silver back above its long-term downtrend line and 34-Day EMA, now at 23.56. It indicates that the bigger bullish picture has come back in play. The downtrend line covers the top boundary of a multi-year declining trend channel.

Buyers Holding Up Silver

From here, an upside breakout occurs or there is a retracement of the previous advance. The past two days have shown little signs of a retracement, rather recent price behavior shows buying pressure remaining. Today’s one day candlestick pattern is a bullish momentum hammer. Aggressive traders may use a breakout of today’s high as a bullish signal. That happens on a decisive move above 24.93.

Breakout of Large Bull Flag

A bullish breakout of the falling parallel channel occurred on April 4. The most recent 61.8% Fibonacci retracement was a correction from that bullish breakout. Not only was there a breakout of a trendline, but also a large descending channel. Together with the initial strong rally silver has a long-term bullish flag continuation signal on its chart. Last week was the second breakout following a retracement. Its significance confirmed by the confluence of the downtrend line, and 34-Day EMA (orange) around the breakout area.

Upside Targets

If silver continues to rise, the first target zone is around the trend high of 26.12. However, given the long-term bullish signs an advance to the previous swing high of 26.93 looks possible, as an initial target. In addition to the bullish signs seen during last week’s breakout, a monthly bullish reversal was also signaled, and strength was confirmed with a daily close above last month’s high.

Support Levels

Alternative to a bullish short-term scenario, silver moves into a retracement. In that case the first support area marked is around the 38.1% Fibonacci retracement at 23.89. That level is followed by the 50% retracement at 23.55.

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