Forex traders will start the new trading week with a light economic calendar which showed New Zealand consumers reigned in their credit card spending for July which posted an unexpected contraction. The the Brazilian IBC-Br Economic Activity Index, expected to show a further slowdown in Latin America’s largest economy, and the US Monthly Budget Statement for July which is anticipated to show another large deficit, are the only economic releases which are likely to get any attention. Will this allow the rally in Silver, a safe haven asset, to extend? Subscribe to the PaxForex Daily Fundamental Analysis and take the profitable side of this precious metal.
The focus will remain on the People’s Bank of China as it set the Yuan Reference Rate at 7.0211 which marked the third consecutive where the Chinese central bank set this rate north of the key 7.0000 level. Forex traders are expected to watch out for this rate on a daily basis which will dictate cross-currency flows. Since commodities are priced in US Dollars in the global market, they often enjoy an inverse relationship which means a weaker US currency will drive commodity prices higher. US President Trump is trying to force his own central bank to manipulate the US Dollar and weaken it which would further boost the price of Silver. Is another breakout imminent? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this precious metal.
Here are the key factors to keep in mind today for Silver trades:
- New Zealand Credit Card Spending: New Zealand Credit Card Spending for July decreased by 0.1%monthly and increased by 1.6% annualized. Economists predicted an increase of 0.6% and of 2.2%. Forex traders can compare this to New Zealand Credit Card Spending for June which was reported flat at 0.0% monthly and which increased by 1.1% annualized.
- Swiss Total Sight Deposits and Swiss Domestic Sight Deposits: Swiss Total Sight Deposits for the week of August 9th are predicted at CHF583.1B and Swiss Domestic Sight Deposits are predicted at CHF475.0B. Forex traders can compare this to Swiss Total Sight Deposits for the week of August 2nd which were reported at CHF582.7B and to Swiss Domestic Sight Deposits which were reported at CHF473.9B.
- Brazilian IBC-Br Economic Activity Index: The Brazilian IBC-Br Economic Activity Index for June is predicted to increase by 0.10% monthly. Forex traders can compare this to the Brazilian IBC-Br Economic Activity Index for May which increased by 0.54% monthly.
- US Monthly Budget Statement: The US Monthly Budget Statement for July is predicted at -$120.0B. Forex traders can compare this to the US Monthly Budget Statement for June which was reported at -$76.9B.
Should price action for Silver remain inside the or breakout above the 16.600 to 17.100 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 16.850
- Take Profit Zone: 18.200 – 18.600
- Stop Loss Level: 16.150
Should price action for Silver breakdown below 16.600 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 16.300
- Take Profit Zone: 15.150 – 15.550
- Stop Loss Level: 16.600
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio. Do you hedge your forex investment properly? With volatility on the rise, it is now more important than ever to protect your balance from downside risk, find out how from PaxForex today and join one of the fastest growing trading communities in the forex market!
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