The Hong Kong manufacturing surprised to the upside, but remains deep in contractionary territory as protests weigh on all sectors of the economy. On the bright side, Australian retail sales managed to rebound from the previous month’s contraction. Silver was able to drift further to the upside as the global economy is slowing down faster than expected and recession fears are on the rise. How much more upside can bulls force and will Silver hit the key psychological 20.000 mark? Today’s fundamental analysis will explore price action in both directions.
Forex traders will await NFP data out of the US for September following the August disappointment. Expectations for an October interest rate cut by the Fed have soared after ISM data showed the worst reading in the manufacturing sector in ten years and the services sector posted its worst performance in three years. Will another NFP disappointment result in a global asset sell-off and cause a price spike in Silver? Follow the PaxForex Daily Fundamental Analysis and take the profitable side of this trade.
Here are the key factors to keep in mind today for Silver trades:
- Hong Kong Manufacturing PMI: The Hong Kong Manufacturing PMI for September was reported at 41.5. Economists predicted a figure of 37.0. Forex traders can compare this to the Hong Kong Manufacturing PMI for August which was reported at 40.8.
- Australian Retail Sales: Australian Retail Sales for August increased by 0.4% monthly. Economists predicted an increase of 0.5% monthly. Forex traders can compare this to Australian Retail Sales for July which decreased by 0.1% monthly.
- Canadian International Merchandise Trade Balance: The Canadian International Merchandise Trade Balance for August is predicted at -C$1.20B. Forex traders can compare this to the Canadian International Merchandise Trade Balance for July which was reported at -C$1.12B.
- US NFP Report: The US NFP Report for September is predicted to show 140K job additions and an unemployment rate of 3.7%. Forex traders can compare this to the US NFP Report for August which showed 130K job additions and an unemployment rate of 3.7%. Private Payrolls for September are predicted to show 133K job additions and Manufacturing Payrolls 4K job additions. Forex traders can compare this to Private Payrolls for August which showed 96K job additions and Manufacturing Payrolls which showed 3K job additions. The Average Work Week for September is predicted at 34.4 hours. Forex traders can compare this to the Average Work Week for August which was reported at 34.4 hours. Average Hourly Earnings for September are predicted to increase by 0.3% monthly and by 3.2% annualized. Forex traders can compare this to Average Hourly Earnings for August which increased by 0.4% monthly and by 3.2% annualized. The Labor Force Participation Rate for September is predicted at 63.2%. Forex traders can compare this to the Labor Force Participation Rate for August which was reported at 63.2%.
- US Trade Balance: The US Trade Balance for August is predicted at -$54.5B. Forex traders can compare this to the US Trade Balance for July which was reported at -$54.0B.
Should price action for Silver remain inside the or breakout above the 17.450 to 17.750 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 17.550
- Take Profit Zone: 19.600 – 20.000
- Stop Loss Level: 17.250
Should price action for Silver breakdown below 17.450 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 17.250
- Take Profit Zone: 15.900 – 16.300
- Stop Loss Level: 17.600
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