Successful test of 20-day MA resistance is bearish
While silver is encountering resistance just below both the 20-day and 50-day MAs, it recently saw support around the confluence of the 61.8% Fibonacci retracement level at 29.68, an internal uptrend line, and a downtrend line. The bottom of the range is at the most recent swing low of 29.68, which corresponds to the 61.8% price level. Therefore, silver has the potential to try to strengthen until there is a drop below 29.68. However, a decisive drop below 29.68 will likely see silver return to the 78.6% level at 29.24, or the 200-day MA at 28.96. Declines below any of the trend lines indicate weakening.
200-day MA at 28.97 is the key level
The long-term trend indicator, the 200-Day MA, has marked dynamic support for the uptrend since it was regained on March 4. Subsequently, a successful test of support at the 200-Day line was completed during the early August swing. low of 26.47. If the 200-day line is retested, it will be the second test of the line in support since it was regained.
Since the decline towards the 200-day line started from the trend high of 34.87 reached about a month ago, there is a good chance that it will mark support again. In other words, since the downward momentum started from the peak, selling pressure may have subsided by then by the time the 200-day mark is reached.
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