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Silver Forecast Video for 23.05.23 by Bruce Powers
Silver continues to consolidate in a relatively tight range around a key support zone that includes the 38.6% Fibonacci retracement zone along with the long-term downtrend line. More specifically, it has been hugging support of the 100-Day EMA and has clearly recognized that line over the past seven days. It is currently at 23.48. A decisive drop below it will see silver head towards the 50% retracement area at 22.94. The 200-Day EMA is a little lower than the 50% level at 23.52.
First Test of Support at 200-Day EMA Possible
If the 200-Day line is approached, it will be the first real test of the line as support since silver went above it in mid-March, and the first test since breaking out above the downtrend line and out of a greater than two-year declining channel.
Last Week Completed a Bullish Hammer Candlestick Pattern
Last week’s candlestick pattern is a bullish hammer. It is best used at the bottom of a trend or swing, as we have now in silver. A rally above last week’s high of 24.20 is bullish and indicates that the current correction may be complete.
Test of Trendline Support is Holding
The current pullback is the first test of the downtrend line as support since silver broke out above it. That strength was confirmed when silver closed above the line over seven weeks, including last week. Once the retracement is complete, silver is expected to continue to trend higher. It is not only the breakout and subsequent strength that provides a bullish outlook for silver, but also what happened before the retracement consolidation phase which started from the high of 29.83 hit in August 2020.
Large Bullish Flag Pattern
A bullish flag type pattern is present when looking at the chart of silver since the March 2020 low of 11.22. The pole starts at that low and goes up to a high of 29.83, 20 weeks later for a 166% advance. If we add the pole to the recent breakout area based on a percentage basis, we arrive at a potential target of around $40.00. This analysis doesn’t been it will be reached, just that it could be. So far, silver is performing in bullish fashion during its retracement and continuing to show underlying strength.
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This article was originally posted on FX Empire
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