Silver Price Surges with Bullish Breakout, Targets Ahead

Bruce Powers
Published: Aug 21, 2023, 20:30 GMT+00:00

Silver's recent bullish reversal gains traction, bolstered by a hammer pattern and a weekly breakout.

Silver, FX Empire

In this article:

Silver Forecast Video for 22.08.23 by Bruce Powers

Turns out that last Tuesday’s low around 22.21 remains the retracement low for silver. That low day consisted of a bullish hammer bottoming candlestick pattern. Although it took a few days, by Friday silver had closed above Tuesday’s high of 22.70 and confirmed the bullish reversal. Today, we see upside follow-through with silver accelerating higher with a wide range green candle that is set to close near the highs of the day. Further, today triggered a bullish weekly breakout for silver and the reaction so far has been positive.


Silver Shows Relative Strength Compared to Gold

Last Tuesday’s low successfully tested support for silver around the prior swing low at 22.10. It ended with a higher swing low of 22.21. This price behavior shows relative strength for silver when compared to gold as gold fell well below its most recent swing low from June during its current correction. We now have a potential double bottom in silver but not until a breakout signal occurs above the recent interim swing high at 2.25.

Silver’s Rally Surpasses Key Resistance Lines

Today’s rally in silver is not only showing strength within the day’s range but it has also lifted silver to above the 200-Day EMA, above the long-term downtrend line, as well as the 12-Day EMA and short-term downtrend lines. A daily close above either will be an additional sign(s) of strength. Note how the 12-Day EMA converged with the short internal downtrend line. The market is recognizing the 12-Day line and therefore going forward it should do well showing short-term dynamic support for the developing uptrend.

First Minor Target is 23.36

Silver will be hitting a 38.2% Fibonacci retracement at 23.36, which is the next near-term target. Once complete, the next higher target for silver is the 50% retracement at 23.72. Nevertheless, once there is a daily close above the downtrend line, which could happen today, the larger bullish pattern that has been developing may kick in again.

Watching for Large Bull Flag Breakout Continuation

Silver formed a large bull flag type pattern that has been developing over several years. The pattern is not a perfect bull flag, but the underlying message is similar – a period of sharp strong buying, followed by a retracement that forms a declining parallel channel. It therefore has the potential for another eventual acceleration higher from last week’s lows. More will be written on this pattern in silver in the coming days.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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