Breakout Above Key Resistance
Silver extended its short-term rally on Monday to a high of $86.11. The advance reclaimed a key moving average and signaled a bullish reversal of structure on a move above the lower swing high at $83.06 from April. Buyers remain in control at time of writing, with silver on track to confirm the reversal with a daily close above that level, reinforcing the improving technical outlook following the March correction.
100-Day Moving Average Back in Focus
The 100-day moving average is the key trend indicator that was reclaimed. Since it has been aligned close to the top boundary of a rising trend channel, a sustained reclaim of that line takes on greater significance as a sign of strength. Silver has been testing resistance near the 100-day moving average since it failed as support in March. Although that was a bearish sign, the decline was not too severe, and the attempted recovery was swift. Two days later, silver began testing the 100-day moving average zone as resistance.
Monday’s bullish breakout likely signals the end of the bearish correction, resulting in a higher swing low of $61.01 in March. In addition, there was a recovery of long-term dynamic resistance, as seen by the rise above both the channel boundary line and 100-day moving average on the same day. That combination strengthens the case that the larger uptrend may now be resuming. Although further evidence for that is needed.
Resistance Zone Emerges Higher
A higher swing low of $70.87 was established in April and a bullish weekly reversal triggered last week. Since price is extending higher following multiple bullish signals, a continuation of the advance is anticipated. The next lower swing high of $96.43 becomes a potential target now that a reversal triggered for the lower swing high of $83.06. That level is close to the 61.8% Fibonacci retracement at $98.50, and together they create a resistance zone from around $96.43 to $98.50.
Long-Term Bullish Outlook Improves
The recovery of the 100-day moving average shows strength for the long-term trend and signs of continuation. This doesn’t mean that silver will immediately rally to new record highs, but it does suggest that the eventual recovery may lead to new highs. Until then, key dynamic support is near the 100-day average, and if silver remains above it, the long-term outlook is bullish. That would further confirm the significance of Monday’s breakout and the recovery from that March correction.
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