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Decline Following Last Week’s Attempt to Break Above Trendline

Silver Forecast Video for 06.02.24 by Bruce Powers

Silver spent much of last week testing resistance around the downtrend line that is a top declining trend channel line. Resistance was seen at a swing high of 23.33. That price level is a little below the 38.2% Fibonacci retracement at 23.45. It begins a potential resistance zone going up to a recent interim swing high at 23.53. Within the zone is the 200-Day MA, is now at 23.44. However, buyers could not maintain control long enough to test the 38.2% retracement zone. This reflects underlying short-term weakness that may further play out.

Weakness Points to 21.94 Support Zone

On Monday, silver dropped below last week’s low of 22.40 and it is on track to close below that price level. This puts the lower support level at risk of being tested again. The support range goes from around 21.94 to 21.80. In addition to Fibonacci levels, that price range also includes an important trend line. It is a potentially significant price zone that has been tested successfully as support recently and it includes two swing lows as well as Fibonacci levels.

Last Week’s Bearish Lower High Leads to Weakness This Week

Last week was the second rally recently that got stuck around resistance of the downtrend line. It generated a lower swing low from the prior rally attempt on January 12, which reflects weakness. Therefore, it could very well lead to a test of the 21.94 price zone. As well, support could be busted to the downside, leading to a test of lower support levels by silver. A drop below 21.80 points to lower prices for silver. Following such a decline, the first target zone is 21.21. That’s where a falling ABCD pattern completes a standard pattern target. It is followed by a prior swing low at 20.69.

Upside Possible If Silver Gets Above Last Week’s 23.33 High

On the upside, a rally above last week’s high of 23.33 is needed for a sign of strength that may be sustainable. Subsequently, a daily close above that high will confirm the breakout. Minor resistance may then be seen again around the 23.53 swing high, however, momentum should be strong enough to break through. At that point silver should be back above the 200-Day MA and heading towards the 50% retracement at 23.92. A rally back above the 200-Day line should be followed by further signs of a strengthening rising trend.

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