Source: PaxForex Premium Analytics Portal, Fundamental Insight
US Retail Sales for June are predicted to increase 0.8% monthly and Core Retail Sales by 0.6% monthly. Forex traders can compare this to US Retail Sales for May, which decreased 0.3% monthly, and Core Retail Sales, which rose 0.5% monthly. Retail Sales in the Control Group for June are predicted to rise 0.3% monthly. Forex traders can compare this to Retail Sales in the Control Group for May, which came in flat at 0.0% monthly.
The US Import Price Index for June is predicted to increase by 0.7% monthly, and the US Export Price Index by 1.2% monthly. Forex traders can compare this to the US Import Price Index for May, which rose by 0.6% monthly, and the US Export Price Index by 2.8% monthly. The US Empire Manufacturing Index for July is predicted at -2.00. Forex traders can compare this to the US Empire Manufacturing Index for June, reported at -1.20.
US Industrial Production for June is predicted to increase 0.1% monthly, and Manufacturing Production to decrease 0.1% monthly. Forex traders can compare this to US Industrial Production for May, which rose 0.1% monthly, and Manufacturing Production, which dropped 0.2% monthly. Capacity Utilization for June is predicted at 80.6%. Forex traders can compare this to Capacity Utilization for May, reported at 80.8%. US Business Inventories for May are predicted to increase 1.3% monthly. Forex traders can compare this to US Business Inventories for April, which rose 1.2% monthly.
Preliminary US Michigan Consumer Sentiment for July is predicted at 49.9. Forex traders can compare this to US Michigan Consumer Confidence for June, reported at 50.0. Current Conditions for July are expected at 52.5, and Expectations at 47.0. Forex traders can compare this to Current Conditions for June, reported at 53.8, and to Expectations, reported at 47.5.
Inflation continues to accelerate, and after the Bank of Canada surprised markets by raising interest rates by 100 basis points, the US Fed is likely to match it, adding to the recession theme. The ECB is on track with more hawkish measures next week, and central banks in Singapore and the Philippines surprised markets with off-cycle monetary adjustments. Borrowing costs will continue to rise throughout 2022, while inflation is expected to remain near current levels, with a minor decrease in July. Precious metals came under selling pressure amid a surging US Dollar, a trend likely to reverse by the end of the summer when more market participants realize that a recession has begun. Chinese second quarter GDP data disappointed with a 2.6% quarterly contraction versus a 1.5% estimated drop, while June retail sales came in above expectations.
The forecast for Silver remains bullish as the recent sell-off took this precious metal into its horizontal support area. Adding to an improving outlook is the Tenkan-sen, which flatlined, but volatility is likely to remain elevated due to the descending Kijun-sen. The narrowing, contracting Ichimoku Kinko Hyo Cloud adds to temporary downside pressure but is likely to fatten out as bearishness eases. Traders should pay close attention to the CCI after it formed a positive divergence in extreme oversold territory followed by a breakout above -100 before a moderate reversal. A higher low is predicted to lead to a renewed breakout, from where price action can rally. Can bulls overpower bears and push Silver into its horizontal resistance area?Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for Silver remain inside the or breakout above the 18.000 to 18.700 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 18.250
- Take Profit Zone: 22.500– 23.300
- Stop Loss Level: 17.400
Should price action for Silver breakdown below 18.000, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 17.400
- Take Profit Zone:15.900 – 16.750
- Stop Loss Level: 18.000
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