Silver’s Bullish Reversal Signals Potential Upside Momentum

Silver Forecast Video for 10.10.23 by Bruce Powers

Silver continues to rally off last week’s low of 20.67, which was a little shy of completing an 88.6% Fibonacci retracement at 20.49. A bullish reversal off the bottom is now clear with silver retracing its most recent downswing by almost 50% (occurs at 22.11). Silver found support for the retracement around an area of Fibonacci confluence levels along with the bottom trendline of a descending parallel channel. Plus, the long-term rising trendline that begins from the March 2020 low converges in the same price zone.

Early Signs that Correction May be Over

Given the subsequent bullish reaction of the past two days, silver has likely completed its correction. This should allow for the larger bullish uptrend to reassert itself eventually. The RSI has turned back up above the 30 oversold level following a dip to its lowest level since February.

Trading Inside Week Could Lead to Choppy Swings

On a weekly basis, silver is trading within last week’s range, and it may continue to do so the rest of this week given how wide it was. Last week’s high was 22.18 and the low was 20.67. An initial upside target for silver is around the prior swing low of 22.10, which is confirmed by the 50% retracement at 22.11. If silver does continue to trade inside week, it will likely see increased volatility with swings up and down given that it is stuck within a range. The 61.8% Fibonacci retracement completes at 22.45, which sits close to the prior swing low of 22.66.

Key Level is Recent Swing High at 12.76

A key level for silver will be the most recent swing high at 12.76. Once that level is exceeded to the upside the bullish outlook for silver should improve. At that point silver would be back above the 200-Day EMA and long-term downtrend line, two key indicators for the health of the bull trend.

Silver’s recent sharp selloff may cause a sharp reaction in the opposite direction – up. We may be seeing the early signs of that now. The recent correction triggered stops during its decline, exceeded a 78.6% retracement and almost reached the extreme 88.6% Fibonacci retracement. However, the uptrend price structure remains intact with a series of higher swing highs and higher swing lows.

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