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Silver Forecast Video for 08.08.23 by Bruce Powers
Silver continues to retrace its prior advance today with a new pullback low of 23.06. Today’s drop put silver back below its 200-Day EMA trend indicator and the internal uptrend line. It looks like silver might close below each of those lines. The lines were potential support and now resistance. Also, a 78.6% Fibonacci retracement of an internal uptrend completed at 23.09.
Trend Indicator: 200-Day EMA Breach Raises Weakness Concerns
A close below the 200-Day EMA, currently at 23.17, confirms weakness that could intensify. The range today was relatively large and red, with a daily close likely to occur near the low of the day, reflecting weakness. Further, resistance around the 100-Day EMA was tested more specifically today than the previous couple of days and price was clearly rejected to the downside. Today’s high is 23.67 and the 100-Day EMA is 23.66.
Channel Dynamics: Silver’s Rising Channel May be Tested with Current Retracement
Silver hit a low of 17.535 at the bottom of the trend last September and has been progressing higher in a parallel trend channel since. Typically, in such a rising channel silver prices move from the bottom rising trendline to the top parallel line and then back again. However, during the most recent retracement, off the April/May double top, silver found support higher the previously, hitting support before reaching the lower channel line. This was a sign of strength and confidence from buyers. Now, with a daily close below the 200-Day line silver is set to possibly test previous support from the June/July swing lows. The low of the pullback was 22.39.
Today’s 23.055 Low is Key Near-Term Support
A decisive drop below today’s low of 23.055 puts silver at risk of a deeper retracement. The first identified support would then be around the 78.6% retracement of a prior upswing at 22.77. So far today, support around the convergence of the internal uptrend line, 78.6% retracement, and 100-Day EMA, identify today’s low as an area for possible support. Silver has not yet fallen through that support zone so there is a chance it holds into a bullish reversal. No signs of it yet though. Until there is a bullish sign silver can be anticipated to fall further to test prior support levels or chop around relatively sideways for a little while as it further tests current support in preparation for a continuation higher.
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This article was originally posted on FX Empire
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