Silver Price Forecast: Signals Potential Bounce Amid Bearish Correction

Daily Close Above 200-Day MA, Short-term Bullish

A daily close above the 200-Day line would indicate strength that could persist into a counter-trend rally. Resistance around the 200-Day line was seen on each of the past two days so today’s advance is a very small change in character, but it is a change. A clearer bullish indication could lead to higher prices and the first sign of that would be on a rally above today’s high of 29.88.

If a rally does come and silver is able to get above and stay above the 20-Day MA, then the next higher target would be a test of resistance around the 50-Day MA (orange). Currently, the 50-Day line is at 31.51 and it resides around the top downtrend line, which represents potential resistance as well.

200-Day Line Needs Attention

The 200-Day MA has represented trend support since early-March of this year. Last week there was a daily close below the line on three days, while there was none previously since the 200-Day line was reclaimed in early-March. Therefore, if a rally is followed by a continuation back down and below the 200-Day line, silver is likely heading to a deeper bearish correction and a longer time below the 200-Day MA.

Nevertheless, the two next lower targets are at the 78.6% retracement at 28.27, and the completion of an initial target for a falling ABCD pattern at 27.11 (purple). Notice that the beginning of the ABCD pattern is at the trend high that completed a five wave Elliott Wave advance at 34.87.

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