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Silver Price Forecast: Bullish Reversal Targets New Trend Highs

FXEmpire.com -

Silver triggers a strong bullish reversal as it breaks above Friday’s high of 30.62 and rallies sharply. It is on track to close strong, in the upper quarter of the day’s price range. Last week’s swing low of 30.05 completed a 38.2% Fibonacci retracement following a 24.9% rally to a trend high of 32.52 reached a week ago. Such a strong bullish reaction following a relatively shallow 38.2% retracement is bullish and a sign of underlying strength. Further, today’s advance has silver rapidly heading towards the 32.52 high as it attempts to rise above it and trigger a bullish trend continuation signal.

Recent Resistance Seen at Top of Trend Channel

Notice that last week’s high found resistance around the top rising trend channel line and the confluence of several Fibonacci price levels. This means that the top channel line should be considered as possible resistance as we move forward in time. It also means that the Fibonacci zone from 32.13 to 32.36 establishes a formidable price zone that could continue to act as resistance. Moreover, a decisive upside breakout above that price zone should lead to silver reaching higher price targets.

Next New Trend High Target of 33.17

Upon a rally to a new trend high silver will first be targeting the 127.2% extended retracement of the recent short pullback at 33.17. That price level is followed by a Fibonacci confluence zone with five targets from 33.78 to 34.06. If the top of the range at 34.06 is exceeded, there are no other targets showing until 34.60.

Long-Term Pattern is Bullish

Whether today begins a new challenge to trend highs or not, silver is well positioned to trend higher over the coming months if not longer. It is following through on a long-term bull flag setup. The declining parallel trend channel that makes up the flag began following a rise of 18.22 points or 156.5% from the March 2020 lows.

That was the low from the initial pandemic selloff. The price target derived from measuring the bull flag on a dollar basis is 41.7. That is a little more than 37% above last week’s close of 30.36. This does not mean that the target will be reached, just that it could be. Subsequent price action and trend price structure will provide additional clues as silver progresses higher.

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This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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