Silver (XAG/USD) Price Forecast: Breakout Above $66.80 Could Unlock Higher Targets

Silver showed minor strength on Monday, as it established a higher daily high and higher low for the first time in three days. A key initial resistance zone for the current advance was tested for the sixth day on Monday, reaching a high of $66.56. That was the second highest level for the advance, following last Wednesday’s high of $66.80. The repeated tests of resistance without a significant reversal are a sign of underlying strength. Further, silver is currently trading above the highest close of the advance at $65.74. A daily close above that level would provide another incremental sign of strength and increase the chance of an eventual breakout above $66.80.

Spot silver daily chart shows strength being retained. Source: TradingView

Shallow Pullback Reinforces Bullish Structure

Monday’s recovery follows a five-day low of $63.51 that was reached on Friday and is now a minor higher swing low. So far, Friday’s decline represented a successful test of support near a previous key resistance level. The recent advance above the lower swing high of $63.28 from early July triggered a trend reversal signal. When a key structure level switches from resistance to support and is followed by renewed strength, it provides important confirmation of a bullish trend reversal. First, prior key resistance has now confirmed as a support area, showing the progression of a bullish trend. And second, if Friday’s higher swing low is retained as support, the resulting pullback would have been very minor, further reflecting strong underlying strength. It did not even reach the 38.2% Fibonacci retracement before buyers stepped in. That shallow retracement is another indication that buyers remain willing to step in relatively quickly on weakness.

Spot silver daily chart shows bullish reversal signs following the July low. Source: TradingView

$66.80 Holds Key to Next Leg Higher

Nonetheless, the bullish implications of the shallow pullback and quick recovery won’t mean much unless there is a bullish trend continuation signal above $66.80. A breakout above that level would confirm renewed upside momentum and open the door to higher resistance targets. There are two initial upside targets if that occurs. The first is the 100-day moving average, which is relatively close near $68.71. This would be the first notable upside test of the indicator as resistance since silver fell below it sharply beginning in mid-May. Higher up is the longer-term 200-day moving average near $71.60. It has not been tested as resistance since it failed as dynamic support in mid-June. Therefore, a breakout above $66.80 could target $68.71 and $71.60. Until then, the repeated resistance tests and shallow pullback signal strengthening conditions, not confirmed continuation.