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Silver Price Forecast: Falls to Test Support at 61.8% Fibonacci Level

FXEmpire.com -

Silver pulled back to test support at the 61.8% Fibonacci retracement on Monday with the day’s low of 22.45. The 61.8% price level is 22.53. At the time of this writing, silver continues to trade near the 22.52 price zone. A daily close above the 61.8% retracement level at 22.52 will be a stronger indication than a close below that level.

Stuck in an Eight Week Price Range

Silver has been trading in a price zone for the past eight weeks with a high of 23.53 and a low of 21.93. It needs to get out of that range before we likely see volatility and upside momentum return. That continues to look like the most likely resolution to the consolidation current consolidation/correction phase. The first sign of strength will be seen in a rally above today’s high of 22.95, followed by a rally above the top of the current range at 23.53.

Advance Above 23.53 Needed

An advance above the 23.53 high will put silver back above a critical price area represented by the 38.2% Fibonacci retracement at 23.45 and the 50-Week MA (not shown) at 23.57. In addition, it will then also be above the downtrend line that has marked resistance of the correction since the May 1 swing high of 26.14. The 50-Week line is being watched as the market has tested it as a resistance area a few times recently.

Once a daily close above 23.53 confirms strength, silver should be ready to confront previous higher price levels starting with the 61.8% retracement at 24.39 and a prior swing high at 24.61. Daily bullish signals start with a rally above today’s high of 22.95, then Friday’s high of 23.00.

Inside Month Likely for February

This week will complete the month of February with an inside month unless there is a drop by Thursday that puts silver below last month’s low of 21.93. An inside month shows consolidation in that time frame and a breakout of the range should lead to a continuation. This month’s high is 23.50 and the low is 21.93.

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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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