Hammer Formation Adds Confirmation Potential
Given the current price action, silver may end the day with a hammer candlestick pattern, establishing a potential one-day bullish pattern at a key support zone. In addition to support indications noted above, Monday’s low also completed a 61.8% Fibonacci retracement of the prior upswing. The recovery of key support levels following the day’s low also included the July lower swing high of $63.28. A bullish trend reversal signal occurred during the August advance that reclaimed that level.
Bullish Evidence Builds
Taken together, the bullish technical evidence suggests that a low for the pullback may have been reached with Monday’s low. An upside breakout above $64.48 would trigger the hammer pattern and generate a new higher swing low at $62.33. Notably, establishing a sustained higher swing low would suggest that the first pullback after a significant upside breakout may be close to completing. Both the July swing high and the 50-day moving average previously represented resistance and are now potentially acting as support.
That shift from resistance to support is bullish behavior and reinforces the developing setup. However, additional signs of strength are needed to confirm the thesis and validate Monday’s apparent shakeout, which began with silver briefly falling below key support before buyers regained control.
