Stalls at Trendline
Last week’s high hit an initial target for a rising ABCD pattern (purple) and that appears to have halted the rise for now. If the pullback continues, there are several price levels to watch for potential support. The 38.2% Fibonacci retracement is at 29.56 and is very close to the 20-day MA at 29.46. Slightly lower is the 61.8% Fibonacci retracement at 29.12, along with the 50-day MA at 28.98.
An upside breakout remains a possibility
During the most recent retracement, silver found support at 26.47. It was followed by a rally and a higher swing high. That low successfully tests support around the 200-day MA, which was at 26.08. It was the first time the 200-day line was tested as support since silver resurfaced on March 4. The subsequent higher swing low signals strength from that low and beyond last week’s breakout. Moreover, further attempts to break higher, above the trendline, are therefore likely.
Bull signal above 31.41
A decisive rally above last week’s high of 31.41 leads to a continuation of the advance with silver then attempting to recapture the July 11 interim swing high of 31.755. That is also the highest price for July. Next on the agenda will be the price area around the recent swing high of 31.52. Further out, a target zone is around 32.34 to 31.42, consisting of two Fibonacci price levels. It includes the extended target of 127.2% for the ascending ABCD pattern, which completed an initial target at last week’s high.
The monthly chart also supports an eventual resolution to the upside, as a bullish reversal was triggered earlier this month following a rally above the August 30.19 high. It followed three months later.
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