A major US bank recommends betting on the growth of the Australian dollar

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Next year, the Australian dollar will rise in price in relation to the namesake from the United States by 12%, predict Bank of America. Investment bank analysts recommend that traders consider buying an "Aussie", which can bring good profits.

The growth of the Australian dollar in a large American bank is associated with the establishment of US-China relations and an increase in world trade. The optimistic scenario assumes the growth of the Australian currency to $ 0.81. It is possible that the course will go even higher. This, according to experts, will occur in the event of a serious increase in the pace of demand for commodities compared with today's data.Da0SEL4gkJUb-V8q5rH13i5nsGFjIoLK2kS0PAudThe main factors that will push the Australian dollar up, can also be attributed to the increase in the yield of Australian government bonds. As noted in Bank of America, of all the G7 countries, Australian securities in 2019 will show the strongest yield growth.

Taking advantage of the growth of oil and iron ore, the Aussie will be able to strengthen not only against the US dollar but also against the local currency assets of Asian countries. World investors will find the Australian stock market one of the most attractive in the new year.

According to banking experts, trade disputes between Washington and Beijing will exhaust themselves in the first half of 2019. It is expected that the parties will sign a package of agreements on mutual concessions.

Studying growth factors for Aussies, one should not lose sight of political events that can significantly change the balance of power in the foreign exchange market. To provoke a cessation of growth of the Australian dollar can federal elections. However, even their unexpected result is unlikely to undermine the potential of the "Australian", analysts summarized.

Since the beginning of this year, the Australian dollar against the US dollar fell by 7.5%. On Thursday, the AUD / USD currency pair is trading in the red, in the region of $ 0.722.

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Brent and WTI crude oil prices collapse by 5%

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Today, Brent crude quotes crashed to $ 58.40 a barrel, losing more than 5% of the cost. Futures for WTI crude oil also fell by about 5%, falling to around $ 50.23 a barrel. This dynamic was the result of the reaction of the markets to the meeting of OPEC representatives in Vienna.

Saudi Arabian Energy Minister Khalid al-Falih said that there are no agreements for the next year in the framework of the OPEC + deal, but various proposals are being considered. The minister also noted that currently the organization plans to reduce production in the range of 0.5 million barrels per day to 2 million barrels per day. Al-Falih considers a reduction of 1 million barrels to be the optimal decrease in production. At the same time, the minister called for extending the agreement by more than six months.

Speech by the Saudis caused a negative market reaction, because before that the media had higher figures, namely, a reduction of 1.3 million barrels per day.

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Pound pending a fateful vote on Brexit

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On December 11, the British parliamentarians will have to make a decision that can determine the scenario of the country's withdrawal from the European Union.

The question of whether the Brexit process will be controlled or not is still open.

There may be several options for the development of events.

1. If the House of Commons approves the "divorce" agreement, it will be signed by the UK and the EU, after which the United Kingdom will leave the alliance on March 29, 2019, and a transition period will begin, which will be completed by the end of 2020.

2. Lawmakers oppose, the country's withdrawal from the EU is carried out without a deal.

3. The probability of holding a second vote on an agreement in Parliament is not excluded.

"The situation is far from resolved. Most likely, there will be a second vote in parliament, which will be held early next year," said Citigroup representatives.

"It is assumed that Theresa May will get time for negotiations, will achieve minor concessions and will win the second parliamentary vote at the last moment in the first quarter," said Samuel Tombs of Pantheon Macroeconomics.

4. A new referendum on Brexit, which, according to Justine Greening, ex-minister of education in the office of Theresa May, can be preliminarily passed on May 30, 2019, is also possible.

"Britain still has a chance to unilaterally cancel Brexit and take a pause in order to decide what will happen next. During this time, it is possible, in particular, to hold a second plebiscite on terms fully defined by the United Kingdom," says JPMorgan specialist Malcolm Barr.

What will happen to the pound?

"Even if the parliament rejects the draft agreement, at this stage the reaction of the pound sterling may be restrained," believes Ulrich Leuchtmann of Commerzbank.

"The market equally lays in the price and exit without a deal and the abolition of Brexit. Therefore, no matter how the events unfold over the course of the next week, the pound may show sharp movements in any direction," said Nomura analyst Jordan Rochester.

"Our baseline scenario implies that the UK will not withdraw from the EU without a deal. We believe that in any case it will be concluded. Against this background, market sentiment towards the pound will become more positive. When political risks recede into the background, the GBP / USD pair is likely to rise to the level of 1.39," said currency strategists at Credit Agricole.

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Oil: OPEC meeting on reducing oil production has begun

The first news appeared on the OPEC meeting. The Minister of Energy of Saudi Arabia said that while an agreement has not been reached, since not all countries are ready to cut production. All possible solutions are being considered since it is important to agree on participation in a transaction with non-OPEC oil producers.

The Saudi minister said that reducing production by 1 million barrels per day, which has been talked about for quite some time, will be sufficient to balance the market, adding that his country does not need permission from any other countries to reduce production.

Iranian Oil Minister Zangeneh also said that Iran has nothing against reducing total production, but will not participate in the deal until the United States lifts the sanctions. According to him, this is the first time when the American president dictates OPEC what to do, which goes beyond what is permitted. According to Zangeneh, the acceptable range of oil prices, which would suit all the countries belonging to OPEC, is 60-70 dollars per barrel.

The Venezuelan oil minister also criticized the American president, saying that OPEC does not receive instructions from anyone, and Donald Trump should act as an observer outside OPEC.

Already appeared and dissent. For example, the Libyan oil state company NOC refused to reduce its production.

Let me remind you that the meeting is designed for two days, it is quite possible that today there will be no final decision.

As for the foreign exchange market, the European currency ignored today's data on the growth of orders in the manufacturing sector of Germany. According to the report, despite a sharp decline in domestic demand, orders in the manufacturing sector of Germany grew in October of this year compared with September. Growth was directly associated with an increase in orders from other eurozone countries.

As indicated in the report from the Federal Bureau of Statistics of Germany, orders in the manufacturing sector in October 2018 increased by 0.3% compared with September, while economists expected the figure to remain unchanged.

As I noted above, domestic orders in the manufacturing sector in Germany declined by 3.2% in October compared with September, while orders from other eurozone countries rose by 7.3%. Demand from outside the eurozone increased by only 0.3%.

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Compared to October of the previous year, orders in the manufacturing sector of Germany decreased by 2.7%.

Today, a number of statements were made by the Ministry of Commerce of China. It was noted in them that the Chinese side will immediately begin to implement the agreements reached with the United States at the G20 summit at the weekend. It is also emphasized that the Chinese authorities intend to fulfill their obligations, and first of all, it concerns the car trade. Over the next three months, China and the United States will discuss issues of intellectual property, technology cooperation, and market access.

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It turns out that food prices may fall.

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World food prices in November fell to their lowest level in more than two years, helped by lower prices for vegetable oils, dairy products, and cereals, the UN said.

The price index for food and agricultural products (FAO), which measures monthly changes in a basket of cereals, oilseeds, dairy products, meat, and sugar, averaged 160.8 points last month compared to 162.9 in October, the lowest level since May 2016. In November, the grain price index amounted to almost 164 points, which is 1.1 percent less than in October. Prices for vegetable oil fell for the 10th consecutive month, in November by 7.6 percent, and reached a 12-year low. Grain prices fell due to high yields, which affected rice exports, and high competition drove corn prices down. Palm oil prices have also dropped significantly, helped by large stocks from leading exporting countries and the recent decline in world prices for petroleum products. Soybean and sunflower oil prices have weakened due to high supplies from the US, the EU, and several developing countries. Prices for dairy products fell by 3.3 percent compared with October, the sixth monthly decline in a row, prices for meat decreased slightly.

FAO reported that cereal production in 2018-1919 amounted to 2.595 billion tons, which is slightly lower compared with the forecast and 2.4 percent lower than last year's record level. FAO's forecast for world wheat production in 2018/19 was 725.1 million tons, which is 2.8 million tons lower than in the previous forecast, reflecting a decrease in crop estimates this year in Turkey and the Russian Federation.

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EUR / USD: plan for the US session on December 6. The market is waiting

To open long positions on EUR / USD, you need:

New serious data is not available, and traders took a pause before important reports from ADP, as well as on the number of people employed outside the agricultural sector. The situation compared with the morning forecast has not changed. Buyers of the European currency can only rely on the formation of a false breakdown in the support area of 1.1313, which will lead to an upward correction in the area of 1.1356 and 1.1391, where I recommend fixing the profits. A signal to buy EUR / USD will also be a breakthrough and consolidation above the resistance of 1.1356. In the case of a further decline, long positions are best returned to the rebound from a minimum of 1.1272.

To open short positions on EUR / USD, you need:

The first test support of 1.1309 can lead to the formation of a small euro rebound up by 15-20 points. However, on the second decline to this level, most likely, a breakdown will be formed with an output of at least 1.1272, where I recommend fixing the profits. In the case of an upward correction in the second half of the day to the area of 1.1356, one can also see short positions in this range, provided that a false breakdown is formed. In a different scenario, you can sell EUR / USD immediately to rebound from a maximum of 1.1391.

Indicator signals:

Moving Averages

Trade is conducted in the area of 30-day and 50-day moving averages, which indicates market uncertainty.

Bollinger bands

Bollinger Bands indicator volatility decreased. There are no market entry signals.

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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

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Europe is ready to declare war on US currency

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According to analysts, European countries are very unhappy with the termination of trade relations with Iran. The EU authorities do not intend to abandon profitable cooperation because of the US sanctions and are ready to resist the American economy.

Recall that Washington abandoned its nuclear agreement with Iran, which is why many companies ceased trading with the Islamic Republic in order to avoid sanctions from America. In response, the European Commission (EC) proposed measures to strengthen the role of the euro in international payments and use it as an alternative to the US dollar.

Representatives of the European Commission called on big business and authorities to increase the use of the euro in energy calculations, as well as to use measures to promote the single European currency in financial markets. The document submitted by the EC, reflected the intention to reduce dependence on the US currency, experts underline.

Experts remind that at the moment the international role of the single European currency has significantly decreased, about 60% of foreign exchange reserves and government bonds issued are in US dollars. The euro is considered the second most popular reserve currency, whose share in the market, however, does not exceed 20%. According to representatives of the European Commission, the growth of the international role of this means of payment will help stabilize the global financial system.

The prolonged trade war between the US and China, as well as the introduction of sanctions against Iran, increased the level of risk when using the US currency. The EU believes that against this background, it is possible to increase the share of the euro in international payments by 35%.

Last week, the European Central Bank (ECB) provided a plan for the European system of instant payments, a competitor of American payment cards. Experts do not exclude that this will reduce the dominant role of the United States in this area. Currently, only eight countries, including Spain, Germany and France, have signed this document.

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CAD and oil: An important meeting of OPEC will begin today. The decision of the Bank of Canada collapsed the national currency

The Canadian dollar collapsed yesterday against the US dollar, and the USD / CAD currency pair updated its monthly highs after the Bank of Canada announced that monetary policy remained unchanged.

According to the report, the Bank of Canada left the one-day interest rate target unchanged at 1.75%, saying that the key rate should be raised to a neutral level to achieve the target inflation rate. The regulator also noted that oil prices, companies' investments and the workload of the economy will play on the formation of interest rates.

As for inflation, the bank expects a weakening of consumer prices in the coming months, while core inflation is in line with expectations, which is due to the almost complete workload of the economy.

As I noted above, oil prices remain the main problem for the regulator. The Bank of Canada is confident that the decline in oil prices reflects geopolitics and uncertainty about global economic growth, and therefore, activity in the Canadian energy sector is likely to be noticeably lower than expected.

Regarding the growth of the Canadian economy in the 3rd quarter, it is fully in line with forecasts. However, data indicate a slowdown in momentum in the 4th quarter of this year due to lower investment by companies, which is partly due to the summer trade uncertainty. This is a trade conflict between the United States, Canada, and Mexico, which resulted in a new trade agreement.

As for the technical picture of the USD / CAD currency pair, the probability of breaking through the current resistance levels around 1.3400 and 1.3460 is extremely small, and from the first time, it is unlikely that we can consolidate above the highs of July this year. Consider long positions after correction to support areas of 1.3300 and 1.3250.

Returning to the topic of oil and its collapse, yesterday, during a technical meeting, OPEC approached a decision to reduce oil production. As indicated in the minutes of the meeting, in which the allies of the cartel, led by Russia, also took part, it was decided to recommend an extension of the transaction to restrict production.

During the speech, the Minister of Oil of Oman said that the oil-producing countries only agreed on the need to reduce production and did not discuss possible figures for reducing production. The important point was that Russia supported the reduction in production.

If we talk about approximate figures, then, according to rumors, producing countries are discussing a reduction in production of at least 1 million barrels per day.

Today, the meeting of the cartel will begin, which will end tomorrow. It is expected that OPEC will agree to reduce oil production by 1.3 million barrels per day.

Today, there are also data on oil reserves in the United States.

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GBP / USD pair: plan for the US session on December 6. Pound traded in a narrow range

To open long positions on the GBP / USD pair, you need:

The situation on the pound has not changed much. On the way, buyers formed a resistance level at 1.2752. Only a breakdown of which will signal a continuation of growth in the area of 1.2798, where I recommend taking profits. In the case of a decrease in the pound on the news on Brexit, support will be the area of 1.2702 and a breakdown can be best considered on new long positions to rebound from a minimum of 1.2657 and 1.2615.

To open short positions on the GBP / USD pair, you need:

Any negative news on Brexit will quickly return pound sellers. Consider short positions at the current time after the formation of a false breakdown in the area of 1.2752 or to rebound from a maximum of 1.2798. The main task of the bears in the afternoon will be a breakthrough and consolidation below support 1.2702, which will lead to a new sale of GBP/USD pair with a breakthrough of the minimum near 1.2657 and exit to 1.2615, where I recommend taking profits.

Indicator signals:

Moving averages

Trade is conducted in the area of 30- and 50-day moving averages, which indicates market uncertainty.

Bollinger bands

Bollinger Bands indicator volatility decreased. There are no market entry signals.

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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

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Wave analysis of GBP / USD for December 6. The pound is prone to fall until December 11

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Wave counting analysis:

During the trading session on December 5, the GBP / USD currency pair added several base points, but this did not affect the current wave counting, which still looks confusing and non-standard. Presumably, the tool is in the framework of the construction of a new wave and three waves downward structure. However, much now for the pair will depend on the outcome of a vote in the UK Parliament on the issue of Brexit. The adoption by politicians of the option of leaving the European Union, which Theresa May offers, will support the pound. Otherwise, the pound may continue to fall against the dollar.

The objectives for the option with purchases:

1.2935 - 50.0% of Fibonacci

1.2991 - 38.2% of Fibonacci

1.3175 - 0.0% Fibonacci

The objectives for the option with sales:

1.2637 - 261.8% of Fibonacci (senior grid)

1.2566 - 127.2% of Fibonacci

General conclusions and trading recommendations:

The currency pair GBP / USD continues to build the downward wave a. Thus, now I recommend very cautious sales, as this wave can end at any moment, and the whole wave pattern can get an even more complex look. An unsuccessful attempt to break through the level of 100.0% may push the pair back up, however, until December 11, wave A will most likely continue its construction.

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Bitcoin analysis for December 06, 2018

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Trading recommendations:

According to the 30M time - frame, I found a shakeout in the background. I also found that sellers got trapped amid the breakout of the trading range, which is a sign that buyers are in control. I also found overbought conditions on the stochastic oscillator, which is another sign of the strength. Watch for buying opportunities. The upward targets are set at the price of $3.806, $3.838 and at the price of $3.872.

Support/Resistance

$3.806– Intraday resistance

$3.710– Intraday support

$3.806 – Objective target 1

$3.838 – Objective target 2

$3.872 – Objective target 3

With InstaForex you can earn on cryptocurrency's movements right now. Just open a deal in your MetaTrader4.

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Intraday technical levels and trading recommendations for GBP/USD for December 6, 2018

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On October 30, the GBP/USD pair looked oversold around the lower limit of the H4 channel around 1.2700 where profitable BUY entries were suggested.

A quick bullish movement was demonstrated towards the price level of 1.3170-1.3200 where another descending high around the depicted downtrend was established.

This initiated the current bearish pullback towards the depicted consolidation-zone of (1.2750-1.2880) where the current sideway movement within the depicted H4 channel was initiated.

Recently, the GBP/USD pair failed to establish a successful bullish breakout above the price level of 1.2880 (the upper limit of the current consolidation range).

This week, unsuccessful bearish breakout attempts were demonstrated below 1.2720. Moreover, signs of bullish recovery originated around 1.2670 earlier Yesterday.

Bullish persistence above 1.2780 (78.6% Fibo level) is mandatory to enhance the bullish side of the market towards 1.2880 and 1.2940 where new trading decisions should be taken upon price action.

On the other hand, the current scenario may pursue a bearish flag continuation pattern provided that bearish persistence below 1.2730 is quickly achieved on lower timeframes. Projected target for the bearish flag continuation pattern is initially located around 1.2600.

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Wave analysis of EUR / USD for December 6. Eurocurrency: the chances of growth remain

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Wave counting analysis:

In the course of trading on Wednesday, the EUR / USD currency pair did not lose a single point, but did not grow either. Thus, the wave marking remains the same and implies the construction of an upward wave from the corrective part of the trend. If this is true, then the increase in quotations will resume with targets located near the level of 100.0%. You should also take into account the weak help of the news background, which can lead to the fact that wave C gets a shorter look.

The objectives for the option with sales:

1.1215 - 0.0% of Fibonacci

The objectives for the option with purchases:

1.1471 - 100.0% of Fibonacci

1.1528 - 127.2% of Fibonacci

General conclusions and trading recommendations:

The currency pair continues to be in the framework of building an upward set of waves. I expect an increase in quotations with targets located near the estimated mark of 1.1471, but I admit the completion of the wave c in the near future. Thus, purchases should be as cautious as possible, and I do not recommend opening sales until a signal is received that the downward trend is more complicated.

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USD / CAD: black bar for Canadian currency

The Canadian dollar has lost its foothold and weakens throughout the market. Paired with the American currency, the Canadian fell to a one-and-a-half year high, testing at the moment which is already at the 34th figure. Moreover, considering the fundamental and technical picture of the USD/CAD pair, it can be assumed that the potential of the upward movement is not yet exhausted and in the medium term, we will see "looney" in the area of 1.3550.

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The starting point of the northern impulse was the December meeting of the Bank of Canada, the results of which disappointed traders. But the Canadian has weakened long before that - since the beginning of October in tandem with the US dollar. It lost more than 400 points, showing a correlation with the oil market. The events of the last week only strengthened the position of the bulls of the pair, after which they managed to overcome quite strong resistance levels.

Thus, against the background of cheaper oil, a very weak release on the growth of the Canadian economy was published last week. For the first time since January of this year, GDP growth fell to a negative area (on a monthly basis) while in annual terms the indicator updated the two-year minimum. The decline in production rates in almost all sectors producing goods was the main reason for the decline in the key indicator of the economy. In addition, the level of oil and gas production has once again decreased, with a more significant decline in the reporting period than in the previous months. Half of the industrial sectors (10 out of 20) showed a slowdown, which in fact could affect the overall GDP indicator.

The structure of this indicator also suggests that in September the growth of household spending slowed down after it increased in the previous quarter. In addition, over the past nine months, a decline in demand for cars has been recorded as a result of which expenditures on durable goods fell by 0.7%.

Such dynamics expectedly disappointed traders. After all, after quite good data on the growth of Canadian inflation, market participants fueled the hope that the Bank of Canada would retain its "hawkish" attitude and even hint at further steps to tighten monetary policy. The consumer price index on a monthly basis showed an unexpected increase of 0.3% in October. In annual terms, a positive trend was recorded similarly up to 2.4%. The core inflation also increased significantly up to 0.4% m/m and 1.5% g/g. Therefore, traders' corresponding hopes for the "hawkish" position of the regulator were fully justified, despite the decline in the oil market.

However, the reality turned out to be somewhat different as the Bank of Canada focused its attention primarily on the existing risks. The regulator stated that since the previous meeting, oil prices have declined substantially, reflecting the uncertainty about the growth of the world economy. According to the Central Bank, the momentum of economic growth dried out in the fourth quarter and activity in the energy sector of Canada will be significantly below forecasts. In addition, the regulator mentioned other negative factors such as decline in investment attractiveness, a likely decrease in price pressure, a contradictory situation in the housing market, and so on.

In general, the Bank of Canada has come to the disappointing conclusion that the situation in the oil market is putting pressure not only on trade indicators but also on key macroeconomic indicators such as inflation and GDP. In other words, the regulator directly linked the dynamics of the oil market with the prospects for further tightening of monetary policy. Although the correlation of USD/CAD with oil prices was observed before, now the influence of this fundamental factor will increase.

The concerns of traders in connection with this circumstance are well founded. Just today, Austria is hosting a meeting of OPEC representatives, whose members are trying to agree on a reduction in oil production by 1.3-1.4 million barrels per day. In this case, the cost of a barrel will return roughly to the level of $ 70-75, providing support to commodity currencies, including the Canadian dollar. At the moment, representatives of the Cartel expect Russia to respond to such prospects and if agreed, the Russian Federation will have to cut production by 250,000 barrels per day. According to rumors, the Russian side is not ready to support this initiative, although there are no official statements on this issue yet. If Moscow really refuses, then oil will go down again, and in turn, the USD/CAD pair will test new resistance levels.

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From a technical point of view, the priority is also the growth of the pair and on all the "older" timeframes - D1, W1, and MN. Hence, the price exceeded the upper line of the Bollinger Bands indicator, and the Ichimoku Kinko Hyo indicator formed a bullish signal "Parade of lines" on the daily chart. On the other hand, the priority of the northern scenario is also visible on the weekly chart. The pair also broke through the upper line of the Bollinger Bands indicator and the price is above the Kumo cloud. The monthly chart indicates that the price is between the middle and upper lines of the Bollinger Bands indicator -that is, the subsequent growth may be more ambitious - up to the level of 1.3540 on the upper line of the above indicator on the monthly chart.

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GBP / USD. December 6. The trading system. "Regression Channels". Parliament debate continues, pound does not receive much

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - down.

The junior linear regression channel: direction - down.

Moving average (20; smoothed) - down.

CCI: -106.2489

The currency pair GBP / USD on Thursday, December 6, once again adjusted to the moving average line, once again bounced off of it and resumed the downward movement. Thus, the pound continues a strong downward trend, and the markets continue to wait for the results of the debate in the British Parliament regarding the Theresa May Act on Brexit, as well as the results of the voting itself, which will be held on December 11. Without exaggeration, it can be said that for the pound sterling, as for the whole of Great Britain, the decisive moment comes. Theresa May has repeatedly stated in her interviews and speeches that there are only two options on Brexit, her script and the rejection of any agreements with the EU. Thus, the parliament will have to choose between "soft" and "hard" options for leaving the EU. Given the fact that about half of the parliament does not support either the first or the second option, it is impossible to predict how the vote will end. Also, do not forget about the option in which Britain can still refuse to leave the EU, since the European Court recognized the existence of such an opportunity, based on the Lisbon Treaty. From a technical point of view, nothing changes in the pair. From time to time, the instrument is adjusted, sometimes it even overcomes the MA, but, as a rule, only briefly, after which it resumes the fall.

Nearest support levels:

S1 - 1.2695

S2 - 1.2665

S3 - 1.2634

Nearest resistance levels:

R1 - 1.2726

R2 - 1.2756

R3 - 1.2787

Trading recommendations:

The currency pair GBP / USD resumed its downward movement. Therefore, at the moment, short positions with targets of 1.2665 and 1.2634 are again relevant. The upward reversal of Heikin Ashi will point to a new round of corrective movement to the moving or slightly higher.

Buy orders will become actual small lots with targets of 1.2817 and 1.2848 if the pair consolidates above the moving average line. However, even in this case, the growth of the British currency can be very short-term.

In addition to the technical picture, you should also consider the fundamental data and the time of their release.

Explanations for illustrations:

The senior linear regression channel is the blue lines of the unidirectional movement.

The junior linear channel is the purple lines of the unidirectional movement.

CCI is the blue line in the indicator regression window.

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

Murray levels - multi-colored horizontal stripes.

Heikin Ashi is an indicator that colors bars in blue or purple.

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EUR / USD. December 6. The trading system. "Regression Channels". Not enough grounds for a new euro trend

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - down.

The younger linear regression channel: direction - up.

Moving average (20; smoothed) - sideways.

CCI: -59.6437

The currency pair EUR / USD on Thursday, December 6, once again consolidated below the moving average line. Yesterday was a day without strong bursts of activity, a pronounced trend movement was absent. This was due to the fact that the States had a Day of Mourning for George Bush Sr., who passed away on November 30. Eurozone business activity indexes supported the euro only for a very short period of time. And the evening report "Beige Book" did not have any influence on the course of trading. Thus, we establish a fact that the downward trend in the instrument is maintained. Today in the United States, reports on the change in the number of people employed in the private sector ADP, business activity index in the areas of services and production of Markit and ISM will be published. In the evening, there will be a speech by Fed Chairman Jerome Powell. Thus, today, a sufficient amount of important macroeconomic information will be available to traders, and market volatility is likely to increase. From a technical point of view, the pair can resume the downward movement today. However, if the pound continues to decline, as if nothing had happened, then the euro has no such compelling reasons for a new and strong decline. Thus, we believe that the downward mood among traders will continue, but in the coming days there will not be a strong fall in the European currency.

Nearest support levels:

S1 - 1.1292

S2 - 1.1230

S3 - 1.1169

Nearest resistance levels:

R1 - 1.1353

R2 - 1.1414

R3 - 1.1475

Trading recommendations:

The EUR / USD currency pair has fixed below the MA. Thus, today it is recommended to trade for a fall after turning the Heikin Ashi indicator down with the goal of Murray level of "1/8" - 1,1292.

Long positions with a target of 1.1414 will become again relevant in small lots, if the bulls manage to overcome the moving average again. However, even in this case, it should be remembered that there are few fundamental grounds for the growth of the euro.

In addition to the technical picture, you should also consider the fundamental data and the time of their release.

Explanations for illustrations:

The senior linear regression channel is the blue lines of the unidirectional movement.

The younger linear regression channel is the purple lines of the unidirectional movement.

CCI - blue line in the indicator window.

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

Murray levels - multi-colored horizontal stripes.

Heikin Ashi is an indicator that colors bars in blue or purple.

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Intraday technical levels and trading recommendations for EUR/USD for December 6, 2018

On the weekly chart, the EUR/USD pair is demonstrating a high-probability Head and Shoulders reversal pattern where the right shoulder is currently in progress.

On the Daily chart, the pair has been moving sideways with slight bearish tendency. Recent bearish consolidations have been maintained within the depicted daily movement channel since June 2018.

On November 13, the EUR/USD demonstrated recent bullish recovery around 1.1220-1.1250 where the lower limit of the channel as well as the depicted demand zone came to meet the pair.

Bullish fixation above 1.1420 is needed to enhance further bullish movement towards 1.1520. However, the market has demonstrated significant bearish rejection around 1.1420 few times so far.

The EUR/USD pair remains under bearish pressure below 1.1420. Thus, the pair remains trapped between 1.1420 and 1.1270 until breakout occurs in either direction.

Bullish fixation above 1.1420 enhances further bullish advancement towards 1.1520 and 1.1610.

On the other hand, if early bearish breakout below 1.1270 is achieved on lower timeframes, a quick bearish decline should be expected towards 1.1150-1.1100.

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Arrest of the top manager of Huawei gave a new impetus to the dollar. How strong is it?

The dollar and the yen found a reason for growth, it turned out to be the arrest of top managers of the Chinese technology giant Huawei in Canada. This caused new concerns about the trade war between the United States and China.

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Just a day ago, the dollar was under pressure because of concerns about a possible recession in the US, but the arrest of Huawei's chief financial officer raised demand for the dollar, as doubts arose regarding the recent truce between Presidents Donald Trump and Xi Jinping. The arrest is associated with violations of US sanctions. Nowadays, political conflicts can jeopardize the success of trade negotiations. In such a situation, interest in riskier assets falls, and investors return to a safe haven. While the situation with the arrest will develop, safe currencies will grow against the background of high demand.

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The dollar and the yen have already risen in price and the ascent will probably continue because at the weekend there will be no new information on the arrest of the financial director of a Chinese company. In turn, the abandonment of risky assets puts pressure on the Chinese yuan and the Australian dollar, which are most vulnerable to the escalation of the trade conflict. The only thing holding back the dollar as signs of a recession and the Fed's signals that the regulator may slow down the pace of interest rate hikes. This pressure will continue at least until the Fed meeting this month when the market sees the Fed position. I think that the recent reaction to the inversion of the US yield curve looks a bit hysterical but the dollar still needs the Fed's aggressive position.

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Simplified Wave Analysis of AUD / USD pair for the week of December 6

Large-scale graph:

The direction of the "Aussie" long-term trend from January of this year looks at the "south" of the chart. The wave is going through a correction phase, after which the trend will continue.

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Medium-scale graph:

From October 5, the price will form an upward wave. At the time of analysis, the structure of the wave looks complete and the price has reached the estimated completion zone.

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Small-scale graph:

Beginning December 3, the downward wave has a high enough wave level to give rise to a larger reversal pattern. The support zone is expected to rebound, which will clarify the current wave pattern.

Forecast and recommendations:

There is a high probability of the whole wave of correction to be completed and the onset of the active depreciation of the pair. Trades are not recommended until confirmation of the reversal.

Resistance zones:

- 0.7350 / 0.7400

Support areas:

- 0.7200 / 0.7150

Explanations of the figures:

The simplified wave analysis uses waves consisting of 3 parts (A – B – C). For the analysis, three main TFs are used. On every last part, the incomplete wave is analyzed. Zones show calculated areas with the highest probability of reversal. The arrows indicate the wave marking by the method used by the author. The solid background shows the formed structure while the dotted shows the expected movement.

Note: The wave algorithm does not take into account the duration of tool movements over time. To conduct a trade transaction, you need confirmation signals from the trading systems you use!

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EUR/USD analysis for December 06, 2018

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Recently, the EUR/USD pair has been trading sideways at the price of 1.1337. According to the M30 time – frame, I found out that price is trapped in the trading range, whic is a sign of indecision. Anyway, on the point and figure chart I found a triangle pattern in progress. Watch for a breakout of the triangle to confirm further direction. Breakout of the level 1.1345 will confirm the upward price and potential testing of 1.1410. Breaking the low at 1.1320 will confirm a further downward movement and potential testing of 1.1265.

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Fundamental Analysis of AUD/JPY for December 6, 2018

AUD/JPY is currently residing below 82.00 area amid the impulsive bearish pressure which pushed the price lower after a bounce off the 84.00 area with a daily close. AUD has been hurt by some sour data. Thus, AUD has lost in value a lot. Japan is trying to bring back stability to its financial sector as well as steady economic growth.

Citing Deputy Governor Debelle's speech today, Australia's central bank has room to cut policy rates from current record lows although the next move is still likely to be an increase rather than a decrease. The disappointing comment from Debelle triggered strong bearish pressure in the pair. On the other hand, Japan is showing steady economic growth. Recently Australia's GDP report was published with a decrease to 0.3% from the previous value of 0.9% which was expected to be at 0.6% and AIG Service Index increased to 55.1 from the previous figure of 51.1. Today Australia's Retail Sales report was published with an increase to 0.3% as expected from the previous value of 0.1% and Trade Balance surplus contracted to 2.32B from the previous figure of 2.94B which was expected to increase to 3.10B. As a result, AUD went into a nosedive. Another reason behind weakness in AUD is the risk aversion sentiment as traders resumed fears that the US and China might reignite the trade dispute.

On the other hand, today Bank of Japan's Governor Kuroda dismissed the chance of a near-term rate hike because raising rates may hamper the process of reaching the target inflation level of 2% which is around the corner. Kuroda stated that raising interest rate may be beneficial to the domestic economy, but monetary tightening is going the hurt the economy in the long run. Monetary Base report revealed an increase to 6.1% from the previous value of 5.9% which was expected to decrease to 5.7%. The positive market sentiment encouraged consistent JPY gains. Tomorrow, Japan's Household Spending report is going to be published which is expected to increase to 1.2% from the previous value of -1.6% and Average Cash Earnings is expected to increase to 1.0% from the previous value of 0.8%.

Meanwhile, JPY is likely to sustain the gains amid optimistic expectation of the upcoming economic reports. On the other hand, AUD is affected by the risk aversion sentiment and weak economic reports that may lead to further weakness of AUD. If Japan presents better-than-expected economic data, the AUD/JPY will carry on with the downward trajectory.

Now let us look at the technical view. The price is currently quite impulsive amid the bearish pressure, leading the price below 82.00. On the back of the current price formation, the price is expected to pull back towards 82.00 area before pushing much lower 80.00 and later towards 78.50 area. As the price remains below 84.00 area, the bearish bias is expected to continue further in the coming days.

SUPPORT: 78.50, 80.00

RESISTANCE: 82.00, 84.00

BIAS: BEARISH

MOMENTUM: IMPULSIVE and VOLATILE

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GBP/USD analysis for December 06, 2018

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Recently, the GBP/USD pair has been trading sideways at the price of 1.2741. According to the M15 time – frame, I found out that price is trading above the Ichimoku cloud and above Kijun- sen, Tenkan-sen and pivot (1.2733), which is a sign that buyers are in control. I also found on the point and figure chart that there is a double top formation created, which is another sign of strength. My advice is to watch for buying opportunities. The upward target is set at the price of 1.2795 (resistance 1).

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BITCOIN Analysis for December 6, 2018

Bitcoin is still quite volatile while pushing lower with certain pullbacks in the process. The price has recently formed a Bullish Divergence which might lead to certain bullish pressure. However, the probability will only increase as the price trades firmly above $4,000 and the dynamic level of 200 EMA resistance along with Kumo Cloud resistance with a daily close. Despite the bears dominance in the Bitcoin, the volatility and deeper bullish pressure indicate certain counter-momentum emerging in the market. However, being below $4,000, 200 EMA, and Kumo Cloud, the bearish pressure is expected to continue pushing the price lower towards $3,500-600 and later towards $3,000 in the coming days.

SUPPORT: 3,000, 3,500, 3,600

RESISTANCE: 4,000, 4,250, 4,500

BIAS: BEARISH

MOMENTUM: VOLATILE

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Fundamental Analysis of USD/CAD for December 6, 2018

USD/CAD has been non-volatile and impulsive amid the bullish pressure, leading the price above 1.3350 with a daily close. Ahead of a widely expected rate hike by the Federal Reserve, Powell's speech, and NFP this week, USD has been dominating CAD consistently which may lead to certain bearish intervention in the coming days.

Despite some headwinds, USD managed to sustain the impulsive bullish momentum over CAD which was quite remarkable despite the recent mixed US economic data and softer rhetoric of the Federal Reserve. Analysts predict weak nonfarm payrolls. Today Revised Non-Farm Productivity report is going to be published which is expected to increase to 2.3% from the previous value of 2.2%, Revised Unit Labor Cost is expected to decrease to 1.1% from the previous value of 1.2%, Trade Balance could have decreased to -55.2B from the previous figure of-54.0B, Unemployment Claims are expected to contract to 226k from the previous figure of 234k, and ISM Non-Manufacturing PMI is expected to decrease to 59.1 from the previous figure of 60.3. Moreover, FOMC Member Bostic is going to speak today about the upcoming interest rate and monetary policy rhetoric. His speech could contribute to further USD gains.

On the other hand, the Bank of Canada left the target overnight rate unchanged at 1.75%. The Policy Statement indicated a minor slowdown in the economic growth which is acknowledged to be stable and consistent. Today Bank of Canada's Governor Poloz is going to speak about the short-term interest rate decisions and future monetary policies that is expected to inject volatility. Moreover, tomorrow Canada's Employment Change is expected to decrease to 10.3k from the previous figure of 11.2k and Unemployment Rate is expected to be unchanged at 5.8%.

Meantime, the pair is set to trade with higher volatility ahead of macroeconomic reports from the US and Canada which are due later this week. Bearish intervention is not ruled out. Though USD has been the dominant currency in the pair, certain pullbacks may be observed if CAD performs better than expected on the back of the economic reports as well as a hawkish statement from Poloz today.

Now let us look at the technical view. The price is currently residing above 1.3400 area leading the price towards 1.3500 resistance area from where it is expected to push lower towards 1.3220-1.3350 area in the coming days. Though the price is still quite impulsive with the bullish pressure, Bearish Divergence emerging in the price structure for a long period of time may come as a strong counter-move. As the price remains below 1.3500 area, certain pullback towards 1.3220-1.3350 support area is expected in the coming days before it continues with the bullish trend again.

SUPPORT: 1.3220, 1.3350

RESISTANCE: 1.3500

BIAS: BULLISH

MOMENTUM: NON-VOLATILE and IMPULSIVE

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Fundamental Analysis of AUD/USD for December 6, 2018

AUD/USD has been impulsive amid the bearish pressure which is leading the price towards 0.7150 support area. AUD has been hurt by recent economic reports. On the other hand, USD finds suport from the strong likelihood of a rate hike by the Federal Reserve. As a result, the pair has gain impulsive bearish momentum.

Yesterday Australia's GDP report was published where economic growth slowed down to 0.3% from the previous value of 0.9%, undershooting expectations for 0.6% expansion. AIG Service Index jumped to 55.1 from the previous figure of 51.1. Today Australia's Retail Sales report was published which showed 0.3% growth in October from a minor 0.1% gain in September. Trade Balance surplus decreased to 2.32B from the previous figure of 2.94B instead of the increase to 3.10B. Due to the downbeat statistics, AUD took a nosedive. Moreover, AUD is losing ground amid the risk aversion sentiment as the US and China could reignite trade tensions.

On the USD side, the US Labor Department is due to release NFP on Friday. The data is expected to be weak. Today Revised Non-Farm Productivity report is going to be published which is expected to increase to 2.3% from the previous value of 2.2%, Revised Unit Labor Cost is expected to decrease to 1.1% from the previous value of 1.2%, Trade Balance is likely to decrease to -55.2B from the previous figure of-54.0B, Unemployment Claims is expected to contract to 226k from the previous figure of 234k, and ISM Non-Manufacturing PMI is expected to drop to 59.1 from the previous figure of 60.3. Moreover, FOMC Member Bostic is going to speak today about the upcoming interest rate and monetary policy rhetoric. His speech is expected to contribute to further USD gains.

Meantime, ahead of FED Chairman Powell's speech and NFP economic reports USD is expected to trade with higher volatility and impulsive momentum against AUD. Any positive data from Australia in the coming days may lead to further corrections. As USD finds solid support from the positive economic data, USD is holding the upper hand over AUD in the short run.

Now let us look at the technical view. The price is currently residing below the dynamic level of 20 EMA with a daily close while pushing lower towards 0.7050-0.7150 support area in the process. The price forming Bearish Divergence managed to sink lower towards the support area from where it is expected to push higher towards 0.7450 resistance area in the future. As the price remains above 0.70 area with a daily close, the bullish bias is expected to continue.

SUPPORT: 0.70, 0.7050, 0.7150

RESISTANCE: 0.7450, 0.7500

BIAS: BULLISH

MOMENTUM: VOLATILE

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Technical analysis of USD/CHF for December 06, 2018

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Overview:

The USD/CHF pair continue to trade upwards from the level of 0.9951 on the H4 chart.

Today, the first support level is currently seen at 0.9951, the price is moving in a bullish channel now. There are no changes in our technical outlook.

The bias remains bullish in the nearest term testing 1.0142 or heigher. Furthermore, the price has been set above the strong support at the level of 0.9951, which coincides with the daily pivot point. This support has been rejected three times confirming the veracity of an uptrend.

According to the previous events, we expect the USD/CHF pair to trade between 0.9951 and 1.0058. So, the support stands at 0.9951, while daily resistance is found at 1.0058.

Therefore, the market is likely to show signs of a bullish trend around the spot of 1.0058.

In other words, buy orders are recommended above the spot of 1.0058/0.9951with the first target at the level of 1.0142; and continue towards 1.0216.

However, if the USD/CHF pair fails to break through the resistance level of 1.0058 today, the market will decline further to 0.9863.

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US economy shows signs of slowing

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According to the report of the Federal Reserve System (FRS) of the USA, presented in the Beige Book, the state of the American economy is not critical, but shows clear signs of a slowdown. This is another negative signal for the markets, experts emphasize.

According to the Fed, the growth of the US economy remains, but is proceeding at a moderate pace. Many analysts believe that the reason for this is an increase in import duties, interest rates and restrictions on the labor market. Experts also note a wage upward trend. However, its preservation may be a negative signal for the markets, experts say. The projected growth in American wages is 3.1% YoY.

A number of experts believe that the American economy has reached its peak, and its growth rates will gradually slow down. In the debt market, experts record numerous alarming signals. Analysts point out that the yield curve has taken an inversional appearance, which is considered the main indicator of the impending recession and the increase in negative trends in the economy.

Experts remind that the inversion in the market of treasuries provoked the recent collapse in the securities market. On Tuesday, December 4, the S & P index fell by 3.24%, the Dow Jones index fell by 3.1%, and the high-tech Nasdaq sank 3.8% immediately. Large-scale dumping of stocks in the US market was provoked by large hedge funds using computer models to track global market trends (CTA), analysts summarize.

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Technical analysis of EUR/USD for December 06, 2018

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Overview:

The EUR/USD pair fell from the level of 1.1338 towards 1.1265. Now, the price is set at 1.1330. The resistance is seen at the level of 1.1338 and 1.1390. Moreover, the price area of 1.1390/1.1338 remains a significant resistance zone. Therefore, there is a possibility that the EUR/USD pair will move downside and the structure of a fall does not look corrective. The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Thus, amid the previous events, the price is still moving between the levels of 1.1338 and 1.1253. If the EUR/USD pair fails to break through the resistance level of 1.1338, the market will decline further to 1.1253 as as the first target. This would suggest a bearish market because the RSI indicator is still in a negative spot and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.1197 so as to test the daily support 2. On the contrary, if a breakout takes place at the resistance level of 1.1338, then this scenario may become invalidated.

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Simplified wave analysis of GBP / JPY for the week of December 6

Large scale graphics:

Since February of this year, the wave of the main trend is moving down. However, the recoil less potential of the movement has been exhausted. From powerful support towards the opposite structure is formed, there's at least a correction.

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Medium scale graphics:

A month ago, the bear wave started actively. The high wave level of this movement indicates a high probability of the beginning of a new section of the main trend. In recent weeks, a flat correction is developing along the upper border of the powerful support level.

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Small scale graphics:

The rising wave from November 15 develops in the form of a shifting plane. The structure lacks the final part (C).

Forecast and recommendations:

Shopping can be quite risky. The probability of a change in the direction of the short-term trend in the coming weeks is high. It is recommended to track signals selling cross.

Resistance zones:

- 145.80 / 146.30

Support areas:

- 143.70 / 143.20

Explanations to the figures: The simplified wave analysis uses waves consisting of 3 parts (A - B - C) . For analysis, 3 consecutive graphs are used. Each of them analyzes the last incomplete wave. Zones show calculated areas with the highest probability of reversal. While the arrows indicate the wave marking by the method used by the author. Lastly, the solid background shows the formed structure, the dotted - the expected movement.

Attention: The wave algorithm does not take into account the duration of tool movements over time. To conduct a trade transaction, you need confirmation signals from the trading systems you use.

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

BofA predicts a significant weakening of the dollar

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Experts of Bank of America (BofA) believe that next year the dollar may become noticeably cheaper against the euro and the yen.

"After the interest rate of the Fed reaches 3.5%, cash will become a more profitable asset than securities," representatives of the financial institute said.

"It is expected that by the end of 2019, investments in stocks and bonds will bring moderate profits, credit spreads will expand, and the yield curve of US government bonds will become flatter or its inversion will occur," they added.

According to experts, one of the central themes next year will be the unprecedented divergence of the monetary policy of the Fed and other global central banks, under which the American regulator will raise the key rate to 3.25-3.50%.

It is assumed that the ability of the US economy to ignore the problems of Europe and China will also have a significant impact on the market.

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What does the Fed say?

The report "Beige Book" standard comes out exactly 14 days before the Fed decision on rates. It is based on the reports of 12 regional Fed banks on the state of the economy in their region.

All counties reported GDP growth but most of the growth rate is declining. Everyone notes a slowdown.

Prices are rising moderately and there is a slowdown.

All countries note the fear of a negative increase in duties against China.

The only area of strong growth is the labor market. There is an acute shortage of labor, especially skilled in some districts.

What does this mean in relation to the Fed?

It is likely that the rate in December will increase by + 0.25%. But it is also quite likely that the Fed will let markets understand that a further increase "will depend on new data". In other words, the rate is already neutral and does not require an increase if there is no inflation.

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Trading plan for 06.12.2018

Yesterday can be described as a meaningless fuss, because against the background of throwing the pound and the euro from side to side, in the end, all remained with their own. In part, this result is caused by the mourning day in the United States on the occasion of the funeral of George Bush Sr., and therefore, the Americans did not work, and mourned the forty-first president. And without the participation of American players, their European colleagues did not dare to make any significant changes in the situation on the market. Although, at least the single European currency had a reason for growth in the form of quite good data on business activity indices, which, although showed a decline, but not as strong as the preliminary data. In particular, the index of business activity in the service sector declined from 53.7 to 53.4, rather than 53.1. Also, the composite index of business activity decreased from 53.1 to 52.7, while preliminary data showed its decline to 52.4. The growth rate of retail sales accelerated from 0.3% to 1.7%, which was slightly worse than the forecasts, as expected growth to 2.1%. But the British statistics disappointed, as the index of business activity in the service sector decreased from 52.2 to 50.4.

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Nevertheless, today we can see the performance of yesterday's statistics as the American players have returned. Nevertheless, to a greater extent, everyone will follow US statistics, especially on the labor market, since tomorrow the Ministry of Labor will publish its monthly report. At the same time, the market reaction will be rather negative, although moderate, since the main events will unfold tomorrow, and it is better not to take risk and remain cautious. As for the statistics themselves, they are rather interesting. Thus, ADP data can show that employment increased by 195,000 versus 227,000 in the previous month. So employment growth rates are declining, which will be perceived negatively. True, data on applications for unemployment benefits may somewhat raise the spirits, since their total number should be reduced by 19,000. And the number of initial applications can be reduced by 9,000, and repeated ones by another 10,000. But the negative will still be more since, in addition to data on the labor market, other data are also published, and production orders are particularly interesting, which should decrease by 0.2%. Well, the final data on business activity indices can confirm the decline in the services sector from 54.8 to 54.4, and the composite from 54.9 to 54.4.

The euro/dollar currency pair once again bounced off the range of 1.1300, forming a pullback of 50 points. It is likely to assume that fluctuations remain within the range of 1.1300/1.1360, while tracking clear fixations.

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The pound/dollar currency pair formed a pullback to the recently completed range level of 1.2720 / 1.2770, after which it returned to the limits of 1.2700. It is likely to assume that the amplitude is kept within the range level of 1.2720 / 1.2770.

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Forecast for GBP / USD pair on December 6, 2018

GBP / USD pair

Yesterday, the sterling pound tried to show again its speculative temper but the strength was already much weaker. The result became the same accordingly as the price remained under the price channel line on the daily chart.

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On the four-hour chart, the price is under the balance lines and MACD while the Marlin oscillator indicates a decreasing market potential. The purpose of the decline is the nested line of the price channel on a daily scale of 1.2540.

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Forecast for AUD / USD pair on December 6, 2018

AUD / USD pair

The overbought Australian dollar, which we talked about in recent days, has had an effect. From the maximum of 4 numbers, the "Australian" has lost 175 points to the current moment. In the Asian session today, the price met with the balance line on the daily chart, where it can now be a little tied up. Below the balance line is the MACD trend indicator line at 0.7192, which can also slow the decline and even lower is the nested line of the price channel at 0.7164. Under these conditions, we can expect a slowdown in the downward price movement. It is possible that the path to 0.7164 will be covered in three days, that is, before the vote in the British Parliament under the Brexit agreement. Next, we are waiting for the price reduction to support the next line of the price channel in the area of 0.7022, which is also the minimum from October 26.

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Escape who can: the market continues to fall

On Wednesday, panic sales in global stock markets continued. Despite the fact that in the US markets were closed due to mourning, S & P500 futures fell by more than 2%, while the European stock indices lost an average of 1 to 2%. Therefore, the decline in government bond yields intensified.

The negative was reinforced by the publication of the Beige Book - a summary report of the Fed on the state of the US economy. Most of the regional offices of the Fed indicates moderate or weak growth, confirming market concerns about the approaching recession. The expectations of the employment report on Friday are becoming increasingly nervous. Under threat and truce in the trade wars between the United States and China - the arrest in Canada of the Huawei company director and the threat of extradition to the United States will inevitably lead to a harsh reaction from China.

Today, the dollar may turn out to be super-volatile - the ADP report on employment in the private sector, ISM on the services sector, the trade balance for October, and updated data on labor productivity in the 3rd quarter, plus the statement by Fed Chairman Powell, will be published. In general, the dollar looks weak, losing not only to the yen as the undisputed favorite of the day, but also, probably, to European currencies.

Eurozone

Prospects for the euro are now generally evaluated in terms of expectations of the ECB meeting at which the regulator will be forced to give its assessment of the slowdown in business in the eurozone. Will the decrease in PMI be recognized as temporary and not requiring drastic measures? Or will there be an admission that the decrease in activity? This is systemic in nature and will force the bank to make adjustments to monetary police.

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One of the main intrigues is the launch of the TLTRO- 3 program in the first half of 2019. The bank is likely to be forced to clarify this issue, since the completion of TLTRO-2 will lead to a liquidity deficit and will contribute to the growth of the euro, which the ECB will lower business activity would like to avoid. As a result, the ECB will have to launch the TLTRO-3 program either as a temporary measure to extend the maturity of operations under the TLTRO-2, or as an independent program. The first option will help stabilize demand for the euro, the second may lead to its fall even against the background of a slowdown in the US economy, and it's unclear what path the ECB will take.

It is already clear that inflation and GDP forecasts will be revised downwards, which in itself is a strong pigeon factor for the euro, so the ECB may refrain from expressing concern in particular. Markets are inclined to believe that the ECB will refrain from announcements of a change in position on monetary policy. Thus, this will keep expectations on the rate at the same levels and ultimately prevent the euro from falling.

In the absence of direction, EURUSD continues to trade in a range in anticipation of news. Support 1.1290 is still relevant, resistance 1.1360 / 65, volatility is likely to increase towards the end of the day against the background of the publication of important macroeconomic data.

Great Britain

The pound is living with expectations of an approximation of the date of voting in the Parliament for Brexit.More so, the expectations are negative, the probability of falling support 1.2650 / 65 looks high. The short-term goal is 1.1430, the rate of decline will be determined by the rate of deterioration of the general political background in the country.

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Indicator analysis. Daily review for December 6, 2018 for the pair GBP / USD

Trend analysis (Fig. 1).

On Thursday, the downward movement with the first goal of 1.2658 is the lower fractal. However, much will depend on the news.

gbpusd-d1-instaforex-companies-group.png

Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - down;

- volumes - down;

- candlestick analysis - up;

- trend analysis - down;

- Bollinger lines - down;

- weekly schedule - up.

General conclusion:

On Thursday, the downward movement with the first goal of 1.2658 is the lower fractal. However, much will depend on the news which has a predictive top.

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Trading plan for 06/12/2018

On Thursday, the 6th of December, the macro calendar is rich in important data releases, so the global investors should keep an eye on German Factory Orders data, ADP Non-Farm Employment Change data form the US, Housing Starts and Trade Balance data from Canada and ISM Non-Manufacturing data form the US. There are speeches scheduled for today from BoC Governor Stephen Poloz, FOMC Member Raphael W. Bostic and BOE Deputy Governor for Markets & Banking Sir David Ramsden.

EUR/USD analysis for 06/12/2018:

The ISM Non-Manufaturing data are scheduled for release at 03.00 pm GMT and the market participants expect a slight decrease in figures from 60.3 to 59.2.

ISM Non-Manufacturing gauge of business conditions in non-manufacturing industries, based on measures of employment trends, prices and new orders. Though non-manufacturing sectors make up the majority of the economy, the ISM Non-Manufacturing has less market impact because non-manufacturing data tends to be more cyclical and predictable. However, these sectors do account for a considerable portion of CPI. As a result, the figure gives insight into conditions which can impact output growth and inflationary pressures.

The ISM Non-Manufacturing Index is based on a sample survey of purchasing and supply executives, weighted according to industry contribution to GDP. The Index is calculated using 50% as the centerline between positive and negative expectations; the figure is reported in headlines as the percent change.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market is still trading insid eof the horizontal zone between the levels of 1.1301 - 1.1402 as the correction extend in time. The key support is seen at the level of 1.1266 and the key resistnace is seen at the level of 1.1471. The momentum remains neutral with a slight downside skew. The market participants should wait for the price to break above or below any of the important levels.

analytics5c08cd7fc3f45.jpg

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Indicator analysis. Daily review for December 6, 2018 for the EUR / USD pair

Trend analysis (Fig. 1).

On Thursday, a downward movement is possible with the first goal which is channel 1.1301 (lower fractal) - 1.1301 historical support level (blue dashed line). Moreover, breaking this channel down is unlikely.

eurusd-d1-instaforex-companies-group.png

Fig. 1 (daily schedule). Comprehensive analysis: - indicator analysis - up; - Fibonacci levels - neutral; - volumes - top; - candlestick analysis is neutral; - trend analysis - up; - Bollinger lines - down; - weekly schedule - up. General conclusion:

On Thursday, a downward movement is possible with the first goal, channel 1.1301 (lower fractal) - 1.1301 historical support level (blue dashed line). Additionally, breaking this channel down is unlikely.

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Technical analysis: intraday levels for EUR/USD, Dec 06, 2018

analytics5c088e8c71308.jpg

When the European market opens, some economic data will be released such as the German Factory Orders m/m. At the same time, the US will also deliver some reports such as the Natural Gas Storage, Factory Orders m/m, Unemployment Claims, Trade Balance, and Challenger Job Cuts y/y. So amid these reports EUR/USD will trade with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1405

Strong Resistance:1.1398

Original Resistance: 1.1387

Inner Sell Area: 1.1376

Target Inner Area: 1.1349

Inner Buy Area: 1.1322

Original Support: 1.1311

Strong Support: 1.1300

Breakout SELL Level: 1.1293

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all Traders or Investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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GBP/USD: plan for the European session on December 6. A 5-day discussion of the agreement on Brexit started in the UK

To open long positions on GBP/USD you need:

The sharp rise in the pound is replaced by a fall. It has long been a familiar scenario for us. At present, a breakthrough of resistance at 1.2732 will be a signal to buy the pound with a close to yesterday's high of 1.2795, where I recommend taking profits. In case the GBP/USD declines in the first half of the day, it is best to rely on purchases only after the formation of a false breakdown around 1.2674 or a rebound from the new low of 1.2625. Any news from the UK Parliament can lead to a surge in the volatility of the pound, so do not forget about the placement of stop orders.

To open short positions on GBP/USD you need:

The bears managed to build a new descending channel, not letting the bulls update the Tuesday high yesterday. An unsuccessful consolidation above resistance of 1.2732 will be another signal to sell GBP/USD with the aim of breaking through and consolidating below support 1.2674, which will lead to a larger decline of the pound to the area of the low of 1.2625 and 1.2569, where I recommend to lock in profits. In case of growth above 1.2732 in the first half of the day, short positions can be returned to the rebound from the resistance of 1.2795.

Indicator signals:

Moving averages

The trade moved below the 30-day and 50-day moving averages, which indicates the further formation of the bear market.

Bollinger Bands

The break of the lower limit of the Bollinger Bands indicator in the area of 1.2700 will lead to selling the pound. The upward correction will be limited by the upper limit of the indicator in the area of 1.2765, from where you can sell immediately on the rebound.

ZOkO1AAC_ZiO0PSY1MGjCkp_g49Efnkf-_WF3ezx

Indicator description

  • Moving Average (average sliding) 50 days - yellow
  • Moving Average (average sliding) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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EUR/USD: plan for the European session on December 6. Volatility drops amid uncertainty

To open long positions on EURUSD you need:

Volatility is gradually decreasing, and investor uncertainty is growing due to concerns about trade policy, budget deficits, and rising US interest rates. The eurozone economy also does not show decent results, which pushes investors away from euro purchases. Buyers of the European currency today can only rely on the formation of a false breakdown in the support area of 1.1309, which will lead to an upward correction in the area of 1.1356 and 1.1391, where I recommend taking profits. A signal to buy EUR/USD will also be a breakthrough and consolidation above the resistance of 1.1356. In case of further decline, long positions are best returned to the rebound from a low of 1.1272.

To open short positions on EURUSD you need:

The first support test of 1.1309 may lead to a slight rebound of the euro upwards by 15-20 points. However, on the second decline to this level, most likely, a breakdown will be formed with an output of at least 1.1272, where I recommend taking profits. In case of an upward correction in the first half of the day in the area of 1.1356, you can also see short positions in this range, provided that a false breakdown is formed. In a different scenario, you can sell EUR/USD immediately to rebound from a high of 1.1391.

Indicator signals:

Moving averages

Trading is conducted below the 30-day and 50-day moving averages, but the market volatility is very low, which indicates the lateral nature of the market with a bearish advantage.

Bollinger Bands

There are no signals on the Bollinger Bands indicator due to the low volatility of the market.

vEp72RhSjvgFgewJnZ-dCJtSdNH6ZpeO7iFsYZJK

Indicator description

  • Moving Average (average sliding) 50 days - yellow
  • Moving Average (average sliding) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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Global macro overview for 06/12/2018

The Bank of Canada (Bank of Canada, BoC) decided on Tuesday, December 5, to keep the target overnight interest rate unchanged at 1.75%, in line with expectations of financial markets and investors. The comments included in the monetary policy statement, however, caused the Canadian dollar rate to weaken significantly, testing the lowest levels against the US dollar from June this year.

The Bank of Canada has begun to appreciate interest rates at the end of 2017, raising them from 0.5% to 1.75% during the last meeting, which is the highest level in a decade. While the markets expected the December's decision not to increase, they reacted negatively to the information that the Bank of Canada sent to investors at the end of the year.

They show that the chances for a hike in January are rather small. This is suggested by fragments of "more space for non-inflationary growth" and declines in oil prices on global markets. In addition, the BoC emphasizes that in the fourth quarter the economic growth dynamics may be smaller than in the current periods of the current year, giving the market clearly to understand that for at least a few consecutive months there is no intention to raise interest rates by a further 25 basis points and will observe developments with side. Still, the bank suggests that interest rates must return to the neutral level. It does not give us what level it really is, but at least three more Canadian hikes are ahead of us.

Let's now take a look at the USD/CAD technical picture at the H4 time frame. The market has broken through the technical resistance zone between the levels of 1.3345 - 1.3382 and made a new high at the level of 1.3403. The momentum is strong and positive and it looks like there is more room to move even higher. The next target for bulls is seen around the level of 1.3465.

analytics5c08cb25ac709.jpg

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