Trading plan EURUSD 11/12/2019

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There is a shortage of important news in the market.

Last week's strong decline in the euro is running out of steam.

At the same time, the EURUSD rate has not yet reached key lows below 1.0900.

So far, the decline we see is no more than the usual 50% correction to the previous growth of the euro.

What can change the current picture?

The stagnation in the euro may last another month – the fact is that on December 11 and 12 very important meetings of the Fed and the ECB will take place – the strategy of the main central banks will be decided for next year or at least for six months.

Therefore, the EURUSD rate may spend this month in a range followed by a choice of direction.

The pound – probably already decided – it's unlikely that the 800-point upward movement will be further "eaten up" – but here, too, the key date for December 12 is parliamentary elections.

EURUSD: we are still holding sales from 1.1070, stop with a reversal up to 1.1095.

However, purchases from 1.1045 are possible.

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

Analysis of EUR / USD and GBP / USD for November 12. Instead of falling, the pound increased. Thanks to Nigel Farage.

EUR / USD

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November 11 ended for the pair EUR / USD with an increase of 10 basis points. However, the increase clearly did not have any effect on the current wave marking. Thus, the construction of the proposed wave c can continue with targets located near the levels of 61.8% and 76.4% Fibonacci. A successful attempt to break through the level of 50.0% will bring the instrument closer to the execution of this working variant.

Fundamental component:

There was no news background for the euro-dollar instrument on Monday. There were also no interesting events in Europe and America, which explains the low market activity. Today, the news background will remain the same, and thus, one should not expect high activity on the currency exchange market today. Such days should simply be waited, since working in the 20 or 30 point range is extremely difficult and inconvenient. Moreover, most of the attention of the currency market is shifted to the pound-dollar pair now, and more specifically to the UK, where there are important economic reports and enough news from the political sphere. Well, the euro-dollar instrument will wait for "its" news, which will also be present this week, but will begin to arrive on the market a little later.

Purchase goals:

1.1175 - 0.0% Fibonacci

Sales goals:

1.0993 - 61.8% Fibonacci

1.0951 - 76.4% Fibonacci

General conclusions and recommendations:

The euro-dollar pair allegedly completed the construction of the upward trend correction section. Since the attempt to break through the minimum of wave b turned out to be successful. Thus, now, I recommend selling the instrument with targets located near the calculated levels of 1.0993 and 1.0951, which equates to 61.8% and 76.4 Fibonacci. A new successful attempt to break through the level of 50.0% or a MACD signal down will just give the green light for new sales of the instrument.

GBP / USD

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On November 11, the GBP / USD pair gained about 60 basis points, and the current wave pattern is starting to get a little complicated and confused. This is due to the fact that the trend section, after October 21, turns out to be somehow long and drawn out, which does not fit well with the possible option with the complication of the upward trend section and the construction of wave 5 . Most likely, the pair will now begin to build a horizontal five-wave segment of the trend, and we will see waves d and e. If this is true, then now we should expect an increase in the instrument to the area of 127.2% Fibonacci, and then again decline to the level of 100.0% Fibonacci.

Fundamental component:

Yesterday's economic reports from the UK were such that today we would have to see the pound-dollar instrument at about 27 figures or lower. However, instead of selling the pound, the market decided to buy it. Of course, not just like that, but thanks to Nigel Farage, the head of the Brexit party, who made a very resonant statement that his members of the same party would not be elected in those areas in which the conservative deputies won the 2017 election. Thus, the market clearly considered that such a message, which means only a slightly greater chance of winning the conservative elections, is much more important than weak GDP, disastrous industrial production in Great Britain. It is not difficult to guess, both reports turned out to be significantly worse than market expectations. Today, we are waiting for two more reports from the UK, on wages and unemployment. The expectations of the market come down to + 3.8% y / y in terms of wages and taking into account premiums and without taking them into account. Any value below should cause a decline in "Britain". In this case, the market should recall yesterday's reports, which were left ignored. The unemployment rate is expected at around 3.9%.

Sales goals:

1.2667 - 76.4% Fibonacci

Purchase goals:

1.2986 - 127.2% Fibonacci

1.3202 - 161.8% Fibonacci

General conclusions and recommendations:

The pound / dollar instrument supposedly completed the construction of an upward trend. Thus, only a successful attempt to break through the level of 1.2986 can be regarded as a complication of this area and become the basis for new purchases of the instrument. At the same time, the trend section threatens to go into horizontal form after October 21, so as not to cast doubt on the further lowering of the instrument.

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

GBP/USD: plan for the European session on November 12. UK election news supports the British pound

To open long positions on GBP/USD you need:

Good data on the economy, which indicated the absence of a recession at the end of this year, as well as the refusal of the leader of Brexit Party, Nigel Faraj to fight for seats in the Conservative Party, led to a sharp increase in the pound. Now the bulls' task is to break the resistance of 1.2874, which will lead to a new wave of GBP/USD growth with updating highs around 1.2910 and 1.2941, where I recommend profit taking. The formation of a false breakout in the resistance area of 1.2850 will also be an additional signal to buy the pound. If the pair decreases due to weak data on changes in the number of applications for unemployment benefits and unemployment in the UK, you can count on long positions in the support area of 1.2827, as well as buy on the rebound from a low of 1.2799

To open short positions on GBP/USD you need:

Today, sellers will try to keep the pair below the resistance of 1.2874, and the formation of a false breakout there, together with weak data on the UK labor market, will only increase pressure on the pound. However, a more important task for sellers will be to return under the support of 1.2850, which will lead to the sale of GBP/USD to the low of 1.2827 and 1.2799, where I recommend profit taking. In the scenario of the pair's further growth after data and news on elections in the UK, short positions can be opened by a rebound from a high of 1.2910, and from a larger resistance of 1.2941.

Signals of indicators:

Moving averages

Trade is conducted above 30 and 50 moving averages, which indicates a possible continued growth of the pound.

Bollinger bands

If the pair decreases, support will be provided by the lower boundary of the indicator at 1.2840. The pound will be limited by the upper level of the indicator at 1.2880.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: Fast EMA 12, Slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD: plan for the European session on November 12. ZEW indices will help euro buyers break above 1.1045

To open long positions on EURUSD you need:

Since yesterday, the technical picture in the EUR/USD pair has not changed. Euro buyers coped with the task and managed to maintain the support of 1.1025, and while trading is above this range, demand for the euro will continue. However, a more important task, in which the ZEW indices for Germany and the eurozone can provide help, will be a break of resistance at 1.1046 in order to reach highs 1.1046 and 1.1065, where I recommend profit taking. The formation of a false breakout in the support area of 1.1026, subject to a decrease in the euro there in the morning, will be another signal to open long positions. In the scenario of EUR/USD decline to the level of 1.1026, it is best to count on purchases after updating the lows of 1.0994 and 1.0969.

To open short positions on EURUSD you need:

The main task of sellers in the first half of the day is to return the pair to the support range of 1.1026, which could not be done today at the Asian session. Only this will keep EUR/USD in the bearish channel, which will lead to the updating of the lows 1.0994 and 1.0969, where I recommend profit taking. With continued upward correction and good data on Germany and the eurozone, the first active short positions can be observed in the resistance area of 1.1046, but selling from there is best only after the formation of a false breakout. Bigger sellers will prefer to return to the market only after a test of a high at 1.1065, from where it is possible to open short positions immediately for a rebound.

Signals of indicators:

Moving averages

Trade is conducted in the region of 30 and 50 moving average, which indicates the lateral nature of the market.

Bollinger bands

A break of the upper boundary of the indicator in the region of 1.1042 will strengthen the demand for the euro. A break of the lower boundary in the area of 1.1028 will lead to the formation of new pressure on the pair.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: Fast EMA 12, Slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com

Overview of GBP/USD on November 12th. Forecast according to the "Regression Channels". Boris Johnson may return to the idea

4-hour timeframe

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Technical data:

The upper channel of linear regression: direction – upward.

The lower channel of linear regression: direction – upward.

The moving average (20; smoothed) – sideways.

CCI: 32.5643

The British pound, which yesterday unexpectedly rose by 80 points, just as unexpectedly as 800 a few weeks ago, seems to end its climb. Recall that the information, which this time pushed the pound up, stated that the leader of the Brexit party, Nigel Farage, would not run for election in the constituencies won by the Conservatives in 2017. That is, Farage almost openly declared that he is in the same boat with the conservatives in the upcoming elections, and the goal of his party is to wean as many votes from competitors as possible.

How honest this is with the electorate is the question. That is, it turns out that the British political forces, to achieve their goals, will not be allowed in some districts (and there are only 317 of them) to vote, for example, for Brexit party deputies. Like this? It is clear that Farage and Boris Johnson have decided to join forces to implement Brexit, and for this to happen, a convincing victory is needed in the election, but, from our point of view, this is beyond "fair play". However, for Boris Johnson, such actions are not new. We recall only the topic with the prophecy of the work of Parliament, with which Johnson simply wanted to remove the deputies so that they could not block the "hard" Brexit. Well, somewhere in Washington, US President Donald Trump rejoices, who is sleeping and seeing how Great Britain will leave the EU, preferably without any agreements. Trump's idea worked, the Brexit and Conservative parties joined forces. Now we need to win on December 12. And then – the most interesting. Donald Trump is in favor of a speedy Brexit, but against making any "deals". It is the same option that Nigel Farage holds. But Boris Johnson, who initially had the same rhetoric, has now changed it to "Brexit with a deal," as Parliament refused to approve the option of leaving without an agreement, and Johnson's "move of the horse" with prorogation failed. However, if the conservatives win the election with the necessary advantage, will Boris Johnson return to the idea of implementing a "hard" Brexit? If the votes in parliament are enough to support any Brexit scenario, will the Prime Minister return to the idea of an unordered divorce, given that his name is often associated with the name of Donald Trump, who opposes any agreements with Brussels and promises a "grand" trade deal if there are no agreements with the European Union? We believe that this is a very serious issue, because you can expect anything from Johnson, and the people of the UK need to take the issue of voting very seriously, because without too much pathos we can say that the upcoming elections will indeed be one of the most important in recent decades for the United Kingdom. Of course, Boris Johnson's return to the idea of a "hard" Brexit is just a hypothesis now.

The pound, from our point of view, reacted once again not quite logically. We do not believe that the growing chances of a conservative victory are positive news for the pound. At least as long as the party is led by Boris Johnson, who, if he had his way, would have left the EU long ago, without wasting time negotiating an agreement. Thus, we believe that with the growing chances of the conservatives winning the election, the chances of some sort of "surprise" from Boris Johnson are also growing. And this "surprise" is unlikely to please the British currency. From a technical point of view, the pound/dollar pair is now fixed above the moving average line, so the trend has changed to an upward one. However, we believe that today or tomorrow, the pair will return to the area below the moving average. Today, for example, traders may be disappointed by another package of weak macroeconomic information from the UK.

Nearest support levels:

S1 – 1.2848

S2 – 1.2817

S3 – 1.2787

Nearest resistance levels:

R1 – 1.2878

R2 – 1.2909

R3 – 1.2939

Trading recommendations:

The GBP/USD pair has consolidated above the moving average, while volatility remains low. Formally, traders can now consider buying the pound with targets of 1.2878, 1.2909, and 1.2939. However, we still recommend trading small volumes. The downward movement of the pair in the coming days remains preferable, however, now the bears need to wait for the pair to re-consolidate below the moving average line.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustrations:

The upper channel of linear regression – the blue lines of the unidirectional movement.

The lower channel of linear regression – the purple line of the unidirectional movement.

CCI – the blue line in the regression window of the indicator.

The moving average (20; smoothed) – the blue line on the price chart.

Support and resistance – red horizontal lines.

Heiken Ashi – an indicator that colors bars in blue or purple.

Possible variants of the price movement:

Red and green arrows.

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