Short-term Elliott wave analysis on EURUSD

EURUSD is in a corrective phase. Price was expected to move higher as wave B and turn lower towards the 61.8% Fibonacci retracement and wave C. Price did exactly that and now it is important for the bullish scenario to see price reverse to the upside.

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EURUSD has made a three wave correction this far towards the 61.8% Fibonacci retracement as expected. Now for this bullish wave scenario to be valid, we need to see price reverse to the upside. Another 5 wave upward move is expected to unfold from current levels. Support is at 1.1030 and this scenario will lose its strength if this level is broken downwards. On the contrary, this bullish scenario will increase its chances of success if price breaks above the B wave high. The price action of this week will tell us more of what to expect for EURUSD....1.13 or 1.09?The material has been provided by InstaForex Company - www.instaforex.com

Weekly Gold analysis

Gold price got rejected at the $1,490 resistance area and remains inside the weekly bearish channel its been in since the summer top. Gold price bounced as expected by our analysis towards $1,480-90 area. Gold back tested the important resistance area of $1,490 which was previously an important break down area.

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Green lines bearish channel

Gold price weekly candlestick is a bearish one as price pushed towards channel resistance and price turned around and ended the week near its week lows. Bulls need to recapture $1,490-$1,500 level in order to hope for new highs above $1,557. Major support is found at last week's low around $1,450. A weekly close below that level will open the way for a move lower towards $1,400-$1,370. We warned in our last analysis that Gold was at a very important resistance level. The rejection that followed was a bearish sign. Bears now need to break below $1,450 in order to confirm they are under control of the trend.

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USD is declining in anticipation of the employment report, CAD and JPY are trading neutrally, but keep chances of growth

The US dollar remains under pressure, declining for the fifth day in a row. Thus, there has been an ambiguous silence around trade negotiations over the past 24 hours. On the other hand, Trump is "maintaining confidence," while China insists that all inflated tariffs should roll back to their previous levels.

At the same time, non-farm growth for November is expected to increase by 185 thousand, which looks suspicious after a very weak ADP report and a higher growth in unemployment applications. Therefore, trading will go in a narrow range before the publication of data, and after the publication, any surprises are possible.

USD/CAD

The decision of the Bank of Canada to leave the rate at 1.75% was perceived by the markets as neutral, since it coincided with forecasts. In addition, some strengthening of the loonie in the last two days is most likely due to other factors - a general decline in the dollar amid weak ISMs and oil growth.

Meanwhile, BoC focuses on key parameters of the state of the economy, such as inflation, unemployment and GDP. In all three parameters, the dynamics is neutral, current levels look stable, and government bond yields have recovered to a 6-month high again after a strong decline in August-September.

But in order to see that this stability rests on an extremely shaky foundation, it is enough to look at two graphs. The first of them reflects the level of household savings, the second - borrowing. Now, it is clear that is impossible to ensure the growth of consumption without the growth of real incomes of citizens.

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Nevertheless, expectations for the loonies look neutral positive in the medium term. Consolidation below 1.3186 is unstable, but gives a chance for further decline to 1.3114. If today's data on US employment are above expectations, USD/CAD may rise to the area of 1.3196 / 3270 and go into the sideways range, otherwise, a decrease is more likely.

USD/JPY

On Thursday, Japanese Prime Minister Abe announced additional financial incentives worth 13.2 trillion yen (121 dollars or about 2% of GDP for 15 months). The markets focusing on the traditional cycle of demand for risk obviously missed this step, and the yen practically did not react. However, this step of the government can signal much more serious factors than the market sees.

Moreover, Japan faces a serious fall in consumer demand. Sales of vehicles in November declined by 14.6%, which decline was 26.4% a month earlier, and now, this figure is at its lowest since 2011.

In October, household spending fell sharply, which is perhaps a reaction to an increase in sales tax. Average wage growth, in turn, is also below forecasts.

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On December 11, the Bank of Japan will publish the quarterly Tankan index. According to forecasts of Mizuho Bank, we should expect a decline in the index primarily in the service sector. At the same time, it is highly likely that the Japanese economy will look weaker than the market currently expects given that the production Tankan is already in negative territory. Mizuho notes that the intention of large enterprises to increase investment in fixed assets, which they expressed in the September survey, is likely to be revised, and will show not an increase, but a decrease in investment in December.

Japanese financial authorities are preparing to resume support for the economy. The probability of expanding the stimulus package by the Bank of Japan is growing, the CFTC report on Friday showed a decrease in the speculative position on the yen. Thus, many signs indicate that attempts will be made to prevent the strengthening of the yen amid a weakening dollar and lower demand for risk.

As a result, reducing the probability of a US-China trade deal is depriving USD/JPY of having a chance to go up from the range of 108.25 / 109.72. Nevertheless, any positive news will push the yen up, as the expectations of the market will coincide with the plans of the financial authorities of Japan.

The material has been provided by InstaForex Company - www.instaforex.com

Indicator analysis: Daily review on December 6, 2019, on EUR / USD currency pair

Trend analysis (Fig. 1).

On Friday, according to the forecast (down), the first lower target is a retracement level of 23.6% which is equivalent to 1.1085 presented in a blue dotted line. If this level is reached, we can expect upper work with the upper target of 1.1117, the upper fractal In a blue dashed line. If the news comes out upper, which is bad for the dollar, then the upper work with the first goal 1.1117 is the upper fractal in a blue dashed line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

Today, an upward movement is possible and the news hits at 13.30 Universal time.

On Friday, according to the forecast, the first lower target is a retracement level of 23.6% which is equivalent to 1.1085 presented in a blue dotted line. If this level is reached, we can expect upper work with the upper target of 1.1117 which is the upper fractal in a blue dashed line. If the news comes out upper, which is bad for the dollar, then the upper work with the first goal 1.1117 is the upper fractal in a blue dashed line.

The material has been provided by InstaForex Company - www.instaforex.com

Trading plan for EUR / USD on December 6, 2019

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The growth of the EUR / USD rate in December was caused by the weak data on the US economy, a possible reduction in the fed rate.

Sellers attempted to push the Euro down from the 1.1100 level but buyers returned it to this level.

Today, it is important to track the impact of the US employment report on the dynamics of EUR / USD pair - and what will be the closing today and this week.

The employment report will be released at 14:30 London time with an expected significant decline in the number of new jobs below 100K. This may cause a new wave of growth in the Euro.

Keep purchases from 1.1035, stop at 1.0990.

Possible purchases are with kickbacks.

The material has been provided by InstaForex Company - www.instaforex.com