Optimism which drove markets higher on the back of trade hopes is starting to show cracks, but yesterday’s Eurozone PMI data surprised to the upside. Safe-haven assets such as gold and Silver sold-off as capital rotated into riskier assets, but support levels in Silver prevented a bigger sell-off. Australian trade data showed a surprise increase in exports, but this precious metal maintained its bullish bias. How will Silver react after European data will be released? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
The Bank of England will be in focus today, but expectations call for no change. Traders will look for forward guidance in regards to monetary policy or its bond buying program. With plenty of unresolved issues and an economy which is heading closer to a recession while central banks remain helpless, safe haven assets such as Silver could get a bullish catalyst and accelerate to the upside. Will bulls rally behind this precious metal or can bulls pressure for a breakdown in Silver? Today’s fundamental analysis will take a look at the upside potential as well as downside risk in this currency pair.
Key Fundamental Factors for Silver
Here are the key factors to keep in mind today for Silver trades:
Australian AiG Performance of Construction Index: The Australian AiG Performance of Construction Index for October was reported at 43.9. Forex traders can compare this to the Australian AiG Performance of Construction Index for September which was reported at 42.6.
Australian Trade Balance: The Australian Trade Balance for September was reported at A$7,180M. Economists predicted a figure of A$5,050M. Forex traders can compare this to the Australian Trade Balance for August which was reported at A$6,617M. Exports for September increased by 3.0% monthly and Imports increased by 3.0% monthly. Forex traders can compare this to Exports for August which decreased by 3.0% monthly and to Imports which were reported flat at 0.0% monthly.
German Industrial Production: German Industrial Production for September is predicted to decrease by 0.3% monthly and by 4.3% annualized. Forex traders can compare this to German Industrial Production for August which increased by 0.3% monthly and which decreased by 4.0% annualized.
UK Halifax House Price Index: The UK Halifax House Price Index for October is predicted to increase by 0.1% monthly and by 1.6% tri-monthly annualized. Forex traders can compare this to the UK Halifax House Price Index for September which decreased by 0.4% monthly and which increased by 1.1% tri-monthly annualized.
Italian Retail Sales: Italian Retail Sales for September are predicted to increase by 1.1% monthly and by 1.0% annualized. Forex traders can compare this to Italian Retail Sales for August which decreased by 0.6% monthly and which increased by 0.7% annualized.
Bank of England Interest Rate Decision, Asset Purchase Target and Corporate Bond Target: The Bank of England is predicted to keep interest rates at 0.75%, the Asset Purchase Target £435B and the Corporate Bond Target at £10B. Forex traders can compare this to the previous Bank of England meeting where the UK central bank decided to keep interest rates at 0.75%, the Asset Purchase Target £435B and the Corporate Bond Target at £10B.
Mexican CPI: The Mexican CPI for October is predicted to increase by 0.52% monthly and by 3.00% annualized. Forex traders can compare this to the Mexican CPI for September which increased by 0.26% monthly and by 3.00% annualized. The Mexican Core CPI for October is predicted to increase by 0.24% monthly. Forex traders can compare this to the Mexican Core CPI for September which increased by 0.30% monthly. The Mexican Bi-Weekly CPI for the week ending October 31st is predicted to increase by 0.13% monthly and by 3.01% annualized. Forex traders can compare this to the Mexican Bi-Weekly CPI for the week ending October 17th which increased by 0.40% monthly and by 3.01% annualized. The Mexican Bi-Weekly Core CPI for the week ending October 31st is predicted to increase by 0.12% monthly. Forex traders can compare this to the Mexican Bi-Weekly Core CPI for the week ending October 17th which increased by 0.13% monthly.
US Initial Jobless Claims and Continuing Claims: US Initial Jobless Claims for the week of November 2nd are predicted at 215K and US Continuing Claims for the week of October 26th are predicted at 1,660K. Forex traders can compare this to US Initial Jobless Claims for the week of October 26th which were reported at 218K and to US Continuing Claims for the week of October 19th which were reported at 1,690K.
US Consumer Credit: US Consumer Credit for September is predicted at $15.000B. Forex traders can compare this to US Consumer Credit for August which was reported at $17.901B.
Should price action for Silver remain inside the or breakout above the 17.350 to 17.850 zone the following trade set-up is recommended:
Timeframe: D1
Recommendation: Long Position
Entry Level: Long Position @ 17.600
Take Profit Zone: 19.600 – 20.000
Stop Loss Level: 16.900
Should price action for Silver breakdown below 17.350 the following trade set-up is recommended:
Timeframe: D1
Recommendation: Short Position
Entry Level: Short Position @ 16.900
Take Profit Zone: 15.500 – 15.900
Stop Loss Level: 17.350
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