Silver Price Forecast: Bearish Retracement or Bullish Reversal?

Silver makes no progress on Monday as it trades inside day. Resistance was seen at the day’s high of 24.89 and support at the low of 24.56. Uncertainty is not only reflected in today’s inside day but also silver is on track to close with a doji (open and close same or similar price).

Completed 38.2% Fibonacci Retracement

Last Friday, silver completed a 38.2% Fibonacci retracement with its low of 24.41. That is also last week’s low. If today’s low is busted to the downside, the chance for a continuation of the retracement increases. However, a drop below 24.41 will provide a more confident bearish signal as it would trigger a new retracement low. The 20-Day MA is at 24.22 and would most certainly be tested as support if the pullback deepens. Also, the 50% retracement is at 24.03.

Further down is the 61.8% Fibonacci retracement at 23.51. Traders will be watching for signs of support around these price levels in anticipation of a bullish reversal. Note that the 8-Day MA turned down slightly today, for the first time since February 29. It was resistance Friday, and it is also resistance today.

Either Deeper Retracement or Bullish Continuation on Deck

Silver could continue either way at this point. Either a deeper retracement or a bullish continuation comes next. The bullish continuation becomes more likely on a rally above today’s high. And, especially on a rally above Friday’s high of 24.95. Note that potential resistance is also nearby around the 8-Day MA, which is also at 24.95. Once the high is cleared to the upside, the recent trend high of 25.78 becomes a target, followed by the swing high from early-December at 25.91.

Key Upside Price Level is 26.135

A key price level to watch higher up is 26.135. It was a swing high in May 2023 and is part of the price structure of the downtrend. Therefore, a daily close above that level will be significant as it further confirms the bullish reversal in silver from down to up that began from the 2022 bottom. Silver has been largely chopping around within a range the past year. A decisive advance above 26.135 should be followed by clearer trending action for silver.

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