Silver Works on Furthering the Development of a Bottom

Silver Forecast Video for 11.07.23 by Bruce Powers

Last week’s advance in silver found resistance at a high of 23.29 thereby completing a basic ABCD pattern, a g a 50% retracement, and test resistance of the 34-Day EMA. A pullback followed leading to a swing low of 22.51 on Thursday. Consolidation occurred on Friday with an inside day. Today, Monday, silver is working on breaking out of that inside day. This would occur on a decisive move above Friday’s high of 23.14.

Silver Looking to Break Above Downtrend Line

Silver ended the week back above its 200-Day EMA, after being below it for most of 12 days. It remains above the 200-Day line today. The next barrier on the upside is last week’s high of 23.29, followed by the 34-Day EMA at 23.27, and 50% retracement at 23.31. A daily close above the 23.31 level will confirm an upside continuation and breakout above the downtrend line. Notice that the trendline is formed with approximately five points, making it potentially more significant than many trendlines. It is also interesting to note that the RSI trendline will have also been broken by then.

Initial Resistance Zones Start with 23.52

If silver can show strength by closing above the downtrend line, it is then likely to continue to advance the larger developing uptrend. Areas where resistance could be seen initially are highlighted in red on the chart. The first is a range from around 23.52 to 23.59. That price range is followed by potential resistance from 23.86 to 24.00.

Big Picture Remains Bullish

The big picture in silver is bullish. Once the current retracement is completed with further bullish indications the larger pattern should kick in. Silver broke out of a long-term downtrend line and declining parallel channel on April 4. Resistance was hit near a prior swing high leading to a double top and bearish reversal in May.

The subsequent decline completed a 61.8% Fibonacci retracement, a common area to find a bottom and reverse. What is most interesting though about the bigger picture in silver is the 165.8% rally that occurred prior to a multi-year pullback. That subsequent retracement completed in May opening the door for the possibility of similar buying enthusiasm to return to the precious metal.

For a look at all of today’s economic events, check out our economic calendar.