Silver Price Forecast: Bearish Correction Targets 200-Day MA Support

Silver triggered a continuation of the bearish correction on Monday on a drop below the previous swing low of 27.31. It hit a price low of 26.50 for the day before bouncing. However, the 27.31 has not been recaptured and silver is on track to close below that price level. Support for the day was seen around an extended declining ABCD pattern target. The 127.2% extension pivot from the pattern was at 26.74. Silver has corrected by 18.5% from the May peak as of today’s low.

Looks to be Heading Towards 200-Day MA

Given the sharp decline today, along with the wider markets, silver looks poised to eventually test support around the next targeted price zone. It includes and is anchored by the 200-Day MA at 26.02. However, other indicators point to the same price area and strengthen the potential for support to be seen around the 200-Day line.

The price zone begins with 26.14, the swing high from early-May 2023. Then there is the completion of a 61.8% Fibonacci retracement at 25.98. Also, there was an interim swing low at 26.02 from early-May. Finally, 25.91 is marked as it was clear resistance at the early-December 2023 swing high and it may now mark support.

200-Day Zone Also Marked by Other Indicators

The 200-Day MA is significant by itself and should be given more weight as possible support given that it lines up with other indicators. Nevertheless, how the price of silver behaves around the price levels should provide clues as to what may be coming next.

The current decline would be the first test of the 200-Day MA as support since a sharp breakout rally began from a March 4 bullish breakout. Such first tests of support at the 200-Day line are frequently met with support. Given the multiple other indications for support, it wouldn’t be surprising to see support that holds and leads to a bullish reversal, around the 200-Day line.

Bottom Line Target if 200-Day Line Fails

A failure of 200-Day MA to hold as support would put silver at risk of eventually falling to test the lower uptrend line for a rising parallel trend channel. If hit today the line would be at approximately 23.53. Since the line is rising, it will represent a higher price in the future. Such a drop doesn’t look likely, but it is possible.

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