Silver Price Forecast: Holds Support, Eyes Breakout Above 50-Moving Average

Silver dipped recently to complete a 38.2% Fibonacci retracement with last Thursday’s low of $32.67. A sharp intraday rally followed and a strong closing price in the upper third of the day’s trading range. The bullish reaction shows the market recognizing the level. It also provides a clear price level to signal further weakness. For Monday, silver traded inside Friday’s price range with a high of $32.68 and a low of $32.00. Notice that resistance was seen around the 50-Day MA for each of two days and it held again today for the third day in a row.

Technical Support Holds

In addition to the 38.2% retracement area, support has been seen during the pullback around a long-term uptrend line and AVWAP line (light blue) from the April low. The combination of several indications showing possible support at last week’s low provides some validation to the idea that it could lead to a continuation higher. Of course, a drop below $31.67 would change the potential bullish thesis.

Stuck at 50-Day MA Resistance

Since today’s high of $32.68 is around the 50-Day MA at $32.63, that price range can be used as the next upside pivot zone. A decisive rally above $32.00 will trigger an upside breakout of an inside day and a reclaim of the 50-Day line. Natural gas would then be heading higher into the recent lower swing high at $33.70. A breakout above that higher would trigger a continuation of the bull trend beginning from the April swing low. But a higher swing low is established once there is a daily close above last Friday’s high of $32.72. If that happens, the second leg up off the April bottom may be ready to begin.

20-Week MA Support Retained

The weekly chart (not shown) provides additional context. It should support for last week right at the 20-Week MA. That was the first successful test of the 20-Week line since it was reclaimed four weeks ago. The subsequent bullish reaction shows buyers getting more aggressive following that low. Notice that the 20-Week MA is rising and the 20-Day MA just turned back up last Friday. Since the 20-Day line had pointed down since April 3, this is a bullish development.

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