Silver Price Forecast: Bullish Reversal Builds Above $62.33

Potential Shakeout Tests Key Support

Silver fell to a new pullback low of $62.33 on Monday, briefly breaking below key support levels before buyers regained control. The higher swing low of $62.56 from August was breached intraday, but the bearish signal is not likely to confirm with a daily close below that level. Silver also dipped briefly below the 50-day moving average near $62.57 earlier in the session before reclaiming it.

Undercut-and-Rally Setup Emerges

Trading continues in the upper half of the day’s range, leaving silver positioned to potentially form an undercut-and-rally pattern. This is a classic shakeout and reversal pattern where price briefly trades below a well-recognized support level, triggers stops and weak longs, then snaps back above that level to show renewed strength. This could provide a potentially lower-risk entry condition, since a drop below Monday’s low would signal a failure of the potential bullish setup.

Hammer Formation Adds Confirmation Potential

Given the current price action, silver may end the day with a hammer candlestick pattern, establishing a potential one-day bullish pattern at a key support zone. In addition to support indications noted above, Monday’s low also completed a 61.8% Fibonacci retracement of the prior upswing. The recovery of key support levels following the day’s low also included the July lower swing high of $63.28. A bullish trend reversal signal occurred during the August advance that reclaimed that level.

Bullish Evidence Builds

Taken together, the bullish technical evidence suggests that a low for the pullback may have been reached with Monday’s low. An upside breakout above $64.48 would trigger the hammer pattern and generate a new higher swing low at $62.33. Notably, establishing a sustained higher swing low would suggest that the first pullback after a significant upside breakout may be close to completing. Both the July swing high and the 50-day moving average previously represented resistance and are now potentially acting as support.

That shift from resistance to support is bullish behavior and reinforces the developing setup. However, additional signs of strength are needed to confirm the thesis and validate Monday’s apparent shakeout, which began with silver briefly falling below key support before buyers regained control.

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