The contraction in the US Dollar continues to fuel a rally in Gold and Silver. Commodities are priced in US Dollars, and safe-haven assets have an inverse relationship with it. Traders are also preparing for a bumpy 2020 with economic concerns increasing. Economic data out of China this morning pointed towards further weakness in the global pipeline, this time in the services sector. Can Silver continue to rally in 2020 or will bears step in? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Silver represents a much smaller market as compared to Gold, but the upside potential in percentage terms is significantly greater. Forex traders should consider hedging their currency trades with commodities. The next decade is expected to be a lot more turbulent than the past two, and financial markets have mispriced economic as well as geopolitical risks. Will Silver accelerate past the $20 in 2020? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.
Here are the key factors to keep in mind today for Silver trades:
- Chinese PMI: The Chinese Non-Manufacturing PMI for December was reported at 53.5 and the Chinese Manufacturing PMI at 50.2. Economists predicted a figure of 54.2 and 50.1. Forex traders can compare this to the Chinese Non-Manufacturing PMI for November, which was reported at 54.4 and to the Chinese Manufacturing PMI, which was reported at 50.2. The Chinese Composite PMI for December was reported at 53.4. Forex traders can compare this to the Chinese Composite PMI for November, which was reported at 53.7.
- US House Price Index: The US House Price Index for October is predicted to increase by 0.4% monthly. Forex traders can compare this to US House Price Index for September, which increased by 0.6% monthly.
- US S&P/Case-Shiller Composite 20: The US S&P/Case-Shiller Composite 20 for October is predicted to increase by 0.3% monthly and by 2.1% annualized. Forex traders can compare this to the US S&P/Case-Shiller Composite 20 for September, which decreased by 0.4% monthly, and which increased by 2.1% annualized.
- US Consumer Confidence: US Consumer Confidence for December is predicted at 128.2. Forex traders can compare this to US Consumer Confidence for November, which was reported at 125.5.
Should price action for Silver remain inside the or breakout above the 17.700 to 18.650 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 18.100
- Take Profit Zone: 19.600 – 20.000
- Stop Loss Level: 17.500
Should price action for Silver breakdown below 17.700 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 17.500
- Take Profit Zone: 16.500 – 16.850
- Stop Loss Level: 17.700
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio. Do you hedge your forex trading account properly and protect it from downside risk? Find out how to properly secure your forex investment at PaxForex where you can grow your portfolio trade-by-trade!
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