Silver Remains Strong While Chance of Minor Correction Increases
Silver Forecast Video for 21.03.23 by Bruce Powers
Silver has advanced as much as 14.9% in seven days off the most recent swing low at 19.76. It completed a little more than a 61.8% Fibonacci retracement of the prior advance at that low. As of today, even though there is a new trend high there are signs of momentum slowing. At the time of this writing there is a possibility silver ends the days with a doji or narrow range open to close. In addition, silver has just about reached a 61.8% retracement (22.73) on the upside, which could present some resistance to the advance.
Potential to Breakout of Declining Trend Channel
You can see on the chart how silver has been tracing out a declining parallel trend channel off the 2020/21 highs. As of the last swing low two weeks ago it is showing a higher swing low within the channel. A higher swing low could be the beginning of an uptrend that can eventually see silver propelled upward out of the channel. That trendline is solid as it connects three highs instead of just two, which is the minimum touches required.
Early Signs of Larger Uptrend
The more significant price level that needs to be exceeded however is the most recent swing high at 24.62. At that point, silver will have an uptrend in place as there is a higher swing low and higher swing high. In addition, it would have confirmed a breakout of the channel at that point.
What’s Next for Silver?
In the near-term, if silver breaks out decisively above the 22.73 Fibonacci level it next heads towards the 78.6% Fibonacci area at 23.58. However, if a pullback begins beforehand first watch for support around the 38.2% Fibonacci retracement (21.58) and the 200-Day EMA (blue) (now at 21.77). The 34-Day EMA (now at 21.71) is also at a similar price area and can be watched as well. Together, watch for support to be found from 21.77 to 21.58 or so.
200-Day Moving Average Takes on Greater Significance
How price reacts to the 200-Day EMA if it tested will be telling as to the underlying strength or weakness in silver for the near-term. The channel shows a declining consolidation phase for silver with price both cycling above and below the 200-Day line for well over a year. Greater strength will be indicated if support is seen there or higher that leads to a continuation of the current advance.
For a look at all of today’s economic events, check out our economic calendar.