Source: PaxForex Premium Analytics Portal, Fundamental Insight
Safe-haven assets like gold and silver can see further gains in 2021 as inflation, and inflationary pressures continue to rise. Global central banks fail to act and view inflation as transitory, while a range of indicators confirms a slowing economy. Unless this trend reverses, stagflation could take hold in 2022, extending the rally in precious metals to fresh all-time highs.
The Final Japanese Leading Index for August was reported at 101.3 and the Final Japanese Coincident Index at 91.3. Economists predicted a figure of 101.8 and 92.1. Forex traders can compare this to the Japanese Leading Index for July, reported at 104.1, and to the Japanese Coincident Index, reported at 94.4.
The German IFO Business Climate Index for October is predicted at 97.9. Forex traders can compare this to the German IFO Business Climate Index for September, reported at 98.8. The German IFO Current Assessment Index for October is predicted at 99.4. Forex traders can compare this to the German IFO Current Assessment Index for September, reported at 100.4. The German IFO Expectations Index for October is predicted at 96.4. Forex traders can compare this to the German IFO Expectations Index for September, reported at 97.3.
The forecast for the XAG/USD remains bullish following its breakout above its descending Ichimoku Kinko Hyo Cloud, which shows signs of bullishness with the Senkou Span A drifting marginally higher. Short-term upside momentum is fading after the Kijun-sen flatlined, suggesting more volatility ahead. The Tenkan-sen resumes its uptrend, but traders should wait for the CCI, currently descending in extreme overbought territory, to retrace below 100 and stabilize before adding to buy positions in silver. Can bulls extend the run in the XAG/USD until it reaches its next horizontal resistance area?. The Ichimoku Kinko Hyo Cloud also started to slowly slope higher, confirming long-term bullish pressures in this precious metal. The CCI moved out of extreme overbought territory and has more upside potential. Will bulls rally and force silver into its horizontal resistance area, including the psychological resistance level of 30.000? 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 24.300 to 24.800 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 24.500
- Take Profit Zone: 26.500 – 27.100
- Stop Loss Level: 23.600
Should price action for Silver breakdown below 24.300, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 23.600
- Take Profit Zone: 22.300 – 22.650
- Stop Loss Level: 24.300
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