Economic data out of the US once again disappointed and showed that the global economy is a lot weaker than expected, the US is no exception to the slowdown. This has boosted demand for safe haven assets such as gold and silver. Plenty of uncertainties remain embedded in the global system which is anticipated to provide a solid floor under silver. Can bulls capitalize and push price action back towards the 20 level? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Yesterday’s trading session was full of PMI reports from Australia, Japan, the Eurozone and the US. In general, most reports disappointed and confirmed that the global economy continues to contract. Yesterday’s session also featured the last ECB meeting under outgoing President Draghi who will leave after eight years of misguided fiscal policy. How will silver trade headed into yet another uncertain weekend? Today’s fundamental analysis will take a look at the upside potential as well as downside risk in this currency pair.
Here are the key factors to keep in mind today for Silver trades:
- Japanese Buying Foreign Bonds and Japanese Buying Foreign Stocks/Foreign Buying Japanese Bonds and Foreigners Buying Japanese Stocks: Japanese Buying Foreign Bonds for the period ending October 18th was reported at ¥536.1B and Japanese Buying Foreign Stocks was reported at ¥42.3B. Forex traders can compare this to Japanese Buying Foreign Bonds for the period ending October 11th which was reported at¥1,062.2B and to Japanese Buying Foreign Stocks which was reported at ¥48.3B. Foreign Buying Japanese Bonds for the period ending October 18th was reported at ¥127.2B and Foreigners Buying Japanese Stocks was reported at ¥522.3B. Forex traders can compare this to Foreign Buying Japanese Bonds for the period ending October 11th which was reported at ¥102.8B and to Foreigners Buying Japanese Stocks which was reported at ¥508.2B.
- Singapore Unemployment Rate: The Singapore Unemployment Rate for October was reported at 2.3%. Forex traders can compare this to the Singapore Unemployment Rate for September which was reported at 2.2%.
- Singapore Industrial Production: Singapore Industrial Production for September increased by 3.7% monthly and by 0.1% annualized. Economists predicted an increase of 0.1% and a decrease of 4.1%. Forex traders can compare this to Singapore Industrial Production for August which decreased by 7.3% monthly and by 6.4% annualized.
- German GfK Consumer Confidence Survey: The German GfK Consumer Confidence Survey for November is predicted at 9.8. Forex traders can compare this to the German GfK Consumer Confidence Survey for October which was reported at 9.9.
- French PPI: The French PPI for September is predicted to increase by 0.3% monthly. Forex traders can compare this to the French PPI for August which was reported flat at 0.0% monthly.
- German IFO: The German IFO Business Climate Index for October is predicted at 94.5. Forex traders can compare this to the German IFO Business Climate Index for September which was reported at 94.6. The German IFO Current Assessment Index for October is predicted at 98.0. Forex traders can compare this to the German IFO Current Assessment Index for September which was reported at 98.5. The German IFO Expectations Index for October is predicted at 91.0. Forex traders can compare this to the German IFO Expectations Index for September which was reported at 90.8.
- US Michigan Consumer Confidence: Final US Michigan Consumer Confidence for October is predicted at 96.0. Forex traders can compare this to the previous US Michigan Consumer Confidence for October which was reported at 96.0.
Should price action for Silver remain inside the or breakout above the 17.600 to 17.950 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 17.750
- Take Profit Zone: 19.250 – 19.600
- Stop Loss Level: 17.150
Should price action for Silver breakdown below 17.600 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 17.150
- Take Profit Zone: 15.900 – 16.300
- Stop Loss Level: 17.600
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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