Silver (XAG/USD) Price Forecast: 200-Day Reclaim Targets Trend Recovery

200-Day Moving Average Back in Play

Silver extended its initial recovery from a low of $61.51 that was established on Thursday, showing strength by reclaiming the 200-day moving average after several days of trading below it. The reclaim of the 200-day moving average looks set to confirm with a daily close above that indicator, which is now near $68.44. That low was a successful test of support near the prior swing low of $61.01 from March. A successful and sustained reclaim of the 200-day moving average would set the stage for an eventual recovery of the long-term bull trend, while reinforcing the significance of the recent support test near the March low.

Bullish Reversal Defines Key Support

Thursday’s bullish outside day, with a close above the prior day’s high, signaled a one-day bullish reversal near a key potential support zone. In addition, the area near the uptrend line and 200-day moving average helped define a zone of support. This generates a key support level at Thursday’s low of $61.51, as a decline below it will signal a continuation of the bearish trend and confirm the breaks below the two dynamic trend indicators. Holding above the 200-day average will keep silver in an overall bullish posture. Whether a recovery occurs in the near term or after a period of consolidation remains to be seen.

Channel Recovery Targets Come into Focus

Silver’s bull trend reached an exhaustion peak of $121.67 in late January. That led to the current bearish correction, which has taken the form of a relatively wide falling trend channel. The low of the correction was at $61.01 in March, with the price of silver down by $60.57 (or 49.9%) at that point. Since an area of long-term trend support has been successfully tested, the upper boundary of the channel now becomes a potential upside target if the recovery continues to gain traction.

On the way there, the 20-day moving average near $72.46 is the first area where resistance may emerge. The 50-day moving average follows near $75.48 and it is aligned near the midline of a large rising trend channel. Based on price structure, the minor lower swing high at $78.83 is the first distinct level that would provide a modest bullish reversal signal if recovered.

Nonetheless, given the significance of the current support zone, it would not be surprising to see further testing of support before demand improves noticeably. Such behavior would be consistent with the recent successful defense of long-term support and could ultimately help establish a stronger foundation for the sustained bullish recovery first signaled by the reclaim of the 200-day moving average.

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