Bullish Reaction Off Lows Points to Higher Prices
Given the bullish reaction off today’s lows, it looks like there is a good chance it may be the low of the retracement. Silver is currently on track to end the day with a bullish hammer candlestick pattern. It reflects sellers dominating earlier in the session, but later in the session the bulls took over. And the bulls are set to close silver in a strong position, near the highs of the day.
Bullish Hammer Candlestick Pattern Today
A bullish hammer reversal candle provides a sign of strengthening upon a breakout above the candle, which would be today’s high of 22.35, at the time of this writing. It signals a potential bullish reversal upon a decisive breakout. This doesn’t mean silver goes straight up if a bullish signal triggers tomorrow or the next day. It is not uncommon to see an inside day first or an upside breakout followed by a pullback to within today’s price range.
Key Support Area Hit and Reverses
If we see bullish follow-through on silver from today’s low, it will turn out to be an ideal area to find support that kicks in a new round of buying as demand increases. There is a combination of support from the long term trendline and the 61.8% Fibonacci retracement, as well as the monthly indication noted above. The bullish reaction from the lows shows price being rejected to the upside thereby confirming support that may hold and lead to a bullish reversal.
Bouncing into Consolidation Range
A rally from current levels will quickly be encountering a block of consolidation that includes choppy price action plus the 50-Day and 200-Day EMAs within the range. Weekly price levels to watch (prior weekly highs) are at 23.24, 23.59, and 23.68. The higher price level is the recent trend high and the top of the consolidation range.
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