Silver Price Forecast: Key Insights

In a recent analysis by Bruce Powers, the silver market is showing signs of potential bullish continuation after rebounding from a significant support level. The article discusses the current price action of silver, which has recently rallied from a 10-day average support zone, reaching a three-day high of $77.90. This movement indicates a possible trend continuation, although there are concerns about further consolidation due to heavy selling pressure near record highs.

Key Technical Indicators

• Inside-Day Breakout: A breakout from an inside day pattern has occurred, which will be confirmed with a daily close above the previous high of $74.57. A further confirmation of a three-day breakout is expected with a close above $76.15.
• Support Levels: Near-term support is identified at Monday’s low of $72.94, which aligns with an uptrend line and the 10-day average.
• Fibonacci Retracement: The recent pullback completed a 38.2% Fibonacci retracement at $70.39, reinforcing a bullish bias unless the 10-day average fails to hold as support.

Market Sentiment and Risks

Despite the bullish signs, there is a risk that the momentum may not be sufficient to push silver to new highs before a more significant correction occurs. The recent peak at $84.03 was met with increased selling pressure, resulting in bearish candle formations that temper bullish momentum. The article notes that silver is currently in a critical resistance zone, having risen significantly from the last breakout level of $54.49.

Conclusion

The analysis concludes that while the silver market shows potential for recovery and bullish continuation, traders should remain cautious of the selling pressure and the risk of a correction. The dynamics of the market suggest that careful monitoring of support and resistance levels will be crucial in the coming days.