Report on the labor market may bring down the dollar

On the eve of the publication of the report on employment in November, the US markets continued to decline, responding to the almost complete absence of positive news. The US trade deficit has grown to a maximum in the last 10 years, and the trade deficit with China has completely updated the record. Of course, the deficit growth is partially due to the strong dollar, which holds back export growth, but it should be noted that the aggressive protectionism of the Trump administration has not yet produced any positive results.

The number of new jobs in the private sector increased in October by 179 thousand, which is noticeably lower than forecast. The risks that today's employment report will turn out to be worse than forecasts have also increased, which, in turn, will force the Fed to adjust its rate forecasts at the December meeting.

In support of the high level of interest rates, the Fed proceeds from the so-called "Phillips rule", according to which rapid growth in average wages spurs inflation. In October, the growth was 3.1%, and it would be a good indicator, if not for one circumstance, the growth in real income adjusted for inflation does not look so rosy.

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In 2018, despite the seemingly steady growth of the labor market, real incomes of the population declined and threaten to go into the negative zone, which completely eliminates expectations for the growth in consumer demand. The business responds correctly, the yield on TIPS 5-year bonds, protected from inflation, has fallen to annual minimums, which means no inflation expectations rise.

The average forecast for the growth rate of new jobs in November is 200 thousand, this is a strong level, and if the data comes out in line with expectations, the dollar will receive support for the period before the Fed meeting. However, a number of indirect indicators, in particular the continuation of the slowdown in the manufacturing sector and the deterioration of the trade balance, indicate that the growth of the US labor market is close to its limit, and today the market may see figures much worse than forecasts.

The collapse of US stock markets can be stopped if the Fed takes a pause in the interest rate growth cycle. Atlanta's Federal Reserve Bank head Rafael Bostic said yesterday that, in his opinion, "a neutral level is what is needed," while interest rates are already close to that neutral level. If Bostic's opinion is shared by the majority of the voting members of the Committee, then softening of the rhetoric and a pause in the growth of interest rates will become inevitable. Markets are preparing for such a scenario, the yield of 10-year treasuries is sharply declining and has already fixed below 2.8%, which clearly indicates a reorientation of markets towards a pause in interest rates.

The dollar is preparing for a global reversal, which can get a real filling today.

Eurozone

Less than a week remains before the ECB meeting, at which the regulator will officially announce the completion of the asset repurchase program. This is clearly a bullish factor for the euro, which could increase if the Fed changes its outlook on interest rates and the ECB will look for ways to offset the expected strong euro gain.

One way is to revise the GDP growth rate for the period up to 2021 downward, that is, the ECB can change its tone in assessing the current slowdown in the eurozone economy, calling it not "temporary", but, let's say, "medium-term".

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Another way is the worsening of the inflation forecast, which is also justified, since oil is declining, despite the efforts made by OPEC +. In any case, the ECB will be interested in preventing the growth of the euro by the end of the year and not increasing the pressure on producers amid a decline in exports.

The currency pair EUR / USD for the day may slightly increase to 1.1415 / 25, if the report on the US labor market is close to the forecast levels, if the market sees numbers worse than expected, the euro will be able to rise to 1.1470.

Great Britain

The pound is under pressure before approaching the date of the Brexit vote in the British Parliament on December 11. Some pullback to 1.28 at the auction on Thursday is a consequence of the sale of the dollar and is temporary, there are no internal reasons for strengthening the pound.

A weak report on the US labor market will allow GBP / USD to rise to 1.2840 / 50, otherwise the pound will go to re-test support of 1.2650.

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Today, US employment data is in focus

Today, all investors' attention will be paid to the release of data on employment in the US economy for the month of November.

The ADP company's private-sector employment data released on Thursday were weaker than expected, which probably led some investors to believe that the Fed may even pause in raising interest rates at the December meeting, and next year this number may increase significantly than expected. Especially this doubt increased after the last speech of J. Powell, in which he stated that interest rates are at neutral levels.

One more important point should also be taken into account. The Fed raises rates and reduces its balance, not only to curb the likelihood of overheating of the national economy, but also to "blow away" the emerging financial bubbles in the local financial market, as the dramatic change in the economic situation from positive to negative the ten-year cycle threatens to turn into a real collapse with all the negative consequences.

Let us return to the publication today of data on employment in the non-agricultural sector of the American economy. According to the consensus forecast, the number of new jobs in November will increase by 200,000. In October, this increase amounted to 250,000.

Investors have a question, but how will the Fed respond to weaker data, will there be a signal about a likely pause in raising interest rates or not?

Considering how, on Thursday, commented on the figures from ADP, J. Powell, and he noted that the labor market remains strong, wages are rising and the overall situation in the economy remains positive, the Fed may not leave such statistics on the way to normalization of monetary policy.

We believe that if there are strong data on the number of new jobs, it will support the dollar, and if they are weaker, but not so much, it will not cause significant damage to the US currency.

Forecast of the day:

The currency pair AUD / USD is trading above a strong support level of 0.7200. If the numbers on employment in the United States prove to be strong and the price overcomes this mark, there is a chance that the local price will continue to decline to 0.7150.

The currency pair USD / CAD is above the level of 1.3365. It is supported by the uncertainty of the decision of OPEC + to reduce the volume of crude oil production to maintain prices on the market. From a technical point of view, if the pair holds above the level of 1.3365, it will have the potential to grow to 1.3500.

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Indicator analysis. The daily review of the currency pair GBP / USD for December 7, 2018

Trend analysis (Fig. 1).

On Friday, the upward movement with the first goal of 1.2818 - 21 average EMA, but much will depend on the news.

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Fig. 1 (daily schedule).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - neutral;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger lines - down;

- Weekly schedule - up.

General conclusion:

On Friday, the upward movement with the first goal of 1.2818 - 21 average EMA, but much will depend on the news.

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Indicator analysis. The daily review of the currency pair EUR / USD for December 7, 2018

Trend analysis (Fig. 1).

On Friday, it is possible to move up with the first goal and channel 1.1420, the upper fractal.

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Fig. 1 (daily schedule).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - neutral;

- Volumes - top;

- Candlestick analysis is neutral;

- Trend analysis - up;

- Bollinger lines - up;

- Weekly schedule - up.

General conclusion:

On Fridays, upward movement with the first goal is possible and the channel of 1.1420 is the upper fractal, but much will depend on the news.

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EUR / USD: Report on the labor market may adversely affect the US dollar

The US dollar fell against the background of weak labor market data, which was published yesterday afternoon. However, good labor productivity figures have managed to limit the fall in the dollar.

According to a report by ADP and Moody's Analytics, the number of jobs in the US private sector increased by 179,000 in November of this year, which was worse than economists' forecasts, which expected growth of jobs in the private sector in November by 190,000.

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The main growth was observed in the servant sector, where the increase amounted to 163,000 jobs, while the sector of production of goods created 16,000 jobs.

As for the weekly data on the number of Americans who have submitted new applications for unemployment benefits, the figure has decreased here, which indicates a favorable situation in the market.

According to a report by the US Department of Labor, the number of initial claims for unemployment benefits fell by 4,000 in the week from November 25 to December 1, to 231,000. Economists had forecast an increase in applications to 224,000.

Labor productivity in the US continued to grow in the 3rd quarter. According to the US Department of Labor, non-agricultural labor productivity increased by 2.3% per annum compared with the previous quarter. A preliminary forecast indicated that growth in the 3rd quarter was 2.2%. Unit labor costs in the 3rd quarter increased by 0.9%.

Economists had expected labor productivity in the third quarter to remain unchanged at 2.2%, while labor costs rose 1.1%

Now to the less pleasant data. According to a report by the US Department of Labor, industrial orders in the United States in October fell immediately by 2.1% to $ 502.68 billion. Economists had forecast a drop in orders of 2.0% in October compared with September. Excluding transport, orders grew by 0.3% in October, while total orders decreased by 0.4% in October.

The US trade deficit continued to grow in October and reached a 10-year high. The main increase was due to an increase in imports and a reduction in exports.

According to the US Department of Commerce, in October of this year, the deficit of foreign trade in goods and services increased by 1.7% compared with the previous month, and amounted to 55.5 billion US dollars. Economists had expected a deficit of $ 55.0 billion.

The report also stated that exports in October declined by 0.1%, while imports rose by 0.2%. Such data will adversely affect US GDP growth in the 3rd quarter of this year.

As for the technical picture of the EUR / USD currency pair, much today will depend on the eurozone GDP data, as well as on an important report on the change in the number of people employed in the US non-farm sector. The main goal of the buyers will be the renewal of large resistance around 1.1420, a breakthrough of which will lead to the formation of a strong upward impulse in the euro. In the case of a decrease in the trading instrument, support can be sought in the area of the minimum of the week from the area of 1.1315-1.1325. Otherwise, it will be prudent to open long positions in risky assets after testing large lows around 1.1270.

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GBP / USD. December 7th. The trading system. "Regression Channels". The pound is adjusted again but remains near its lows

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) - sideways.

CCI: 57.8306

The currency pair GBP / USD on Friday, December 7, as well as the EUR / USD currency pair, fixed above the moving, and also failed to develop an upward movement. In the near future, the pair may return to the area below the moving average line and thus resume the downward trend. Today, the US currency can help macroeconomic reports from the United States, in particular, NonFarm Payrolls and changes in the level of wages for November. There are currently no new posts on the Brexit from the British Parliament. Probably, therefore, in recent days, the pound sterling is quite often adjusted, while maintaining the downward trend and not going far from its minimum. We believe that until December 11, when the Theresa May's Brexit vote results are known, the uncertainty will remain, and the GBP / USD pair will remain within the framework of the downward trend. It is impossible to predict the voting results, therefore, it is also extremely difficult to predict what will happen after December 11. Traders can only wait for the voting date in a cautious mode, and it will be possible to build new trading strategies for the coming weeks only after the announcement of the voting results. From a technical point of view, the pair is corrected, but this correction can be transformed back with a downtrend. But. Above the MA, small chances of strengthening the pound remain, especially if US reports fail today.

Nearest support levels:

S1 - 1.2756

S2 - 1.2726

S3 - 1.2695

Nearest resistance levels:

R1 - 1.2787

R2 - 1.2817

R3 - 1.2848

Trading recommendations:

The currency pair GBP / USD is within the correction. A color of 1-2 bars in purple with the Heikin Ashi indicator will signal a new round of upward movement with targets of 1.2817 and 1.2848. In this case, it will be possible to open small and short-term long positions.

Short positions will become relevant after the price is fixed back below the MA. In this case, the initiative will return to the bears again, and it will be possible to open sell orders with targets of 1.2695 and 1.2665.

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 7th. The trading system. "Regression Channels". US reports can support the US dollar

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: 54.6585

The EUR / USD currency pair on Friday, December 7, completed Murray's level of "3/8" - 1.1414 and again failed to overcome it. As we have repeatedly said, despite even regular price fixing above the moving average, the growth potential of the euro currency is now very limited. At the moment, the pair is ready to descend back to the moving average line and fix below it. Moreover, in recent days there has been a frank flat, that is, no trend movement. This phenomenon is logical, given the uncertainty associated with the final stage of the procedure Brexit. Recall that now in the British Parliament, there are 5-day debates on this issue, which will end on December 11 with a vote on the proposals of Theresa May. This topic has more relevance, of course, to the British pound, however, the Eurocurrency will also react to what is happening in Britain. Plus, a report on GDP for the third quarter will be published in the European Union today. Neutral forecasts, 1.7% g / g. Any deviation of the real value from the forecast can cause traders to react. In the States today, there are reports on unemployment, changes in the volume of wages, NonFarm Payrolls. The deviation of these reports in a big way (except for unemployment) will provoke a strengthening of the American currency with a high degree of probability.

Nearest support levels:

S1 - 1.1353

S2 - 1.1292

S3 - 1.1230

Nearest resistance levels:

R1 - 1.1414

R2 - 1.1475

R3 - 1.1536

Trading recommendations:

The EUR / USD currency pair has fixed above the moving, but is currently being adjusted. If the pair remains above the moving average, and the Heikin Ashi indicator turns up, this will signal the opening of new long positions with a target of 1.1414.

Sell orders are recommended to open after bears overcome a moving average line with a target of 1.1292. Macroeconomic statistics, scheduled for today in the US, can help traders to overcome moving.

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.

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

Bitcoin analysis for December 07, 2018

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Trading recommendations:

According to the M15 time - frame, I found that BTC has been trading downwards. The price tested the level of $3.263. I also found that BTC is trading in the consolidation channel (a bearish flag), which is a potential re-distribution zone for more downside movement. My advice is to watch for a breakout of the support trendline to confirm further downward continuation. The downward target is set at the price of $2.961.

Support/Resistance

$3.380– Intraday resistance

$3.263– Intraday support

$2.961 – Objective target 1

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

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Fundamental Analysis of USD/CHF for December 7, 2018

USD/CHF has been following the downward bias in light of the positive economic reports from Switzerland, published this week, despite the FED's hawkish rhetoric and mixed economic data from the US. Ahead of NFP reports which are due today, USD is expected to regain momentum against CHF, leading the price much higher in the coming days.

Federal Reserve Chairman Jerome Powell recently stated that US Economy remains on a sound footing. He is especially pleased about the job market. However, he did not say anything about upcoming interest rate hike which made the market sentiment quite indecisive. USD/CHF is set to trade with higher volatility ahead of the reports of crucial importance on the US market. Today US Average Hourly Earnings report is going to be published which is expected to increase to 0.3% from the previous value of 0.2, Non-Farm Employment Change is expected to decrease to 198k from the previous figure of 250k, and Unemployment Rate is expected to be unchanged at 3.7%. Though the expectations are mixed, the market is cautiously optimistic about USD that might lead to certain gains on the USD side if better-than-expected economic data is published today.

On the CHF side, recently Retail Sales report was published with an increase to 0.8% from the previous value of -2.5% which was expected to be at -0.7%, Manufacturing PMI rose to 57.7 from the previous figure of 57.4 which was expected to decrease to 56.3, and CPI contracted to -0.3% from the previous value of 0.2% which was expected to be at -0.1%. Today, Foreign Currency Reserves report was published with a decrease to 749B from the previous figure of 753B.

Meantime, CHF has found support from the economic reports published today. As a result, the market is in the wait-and-see mode ahead of NFP today. Though NFP reports expectations are mixed, better results may lead to impulsive gains on the USD side which might sustain further in the future as well.

Now let us look at the technical view. The price has formed Bullish Divergence while pushing lower with certain corrections in the process. As for the current price formation, the price is expected to push higher towards 0.9980-1.0050 resistance area in the coming days. As the price remains above 0.9850 area, the bullish bias is expected to continue despite any further pullbacks or volatility in the pair.

SUPPORT: 0.9700, 0.9850

RESISTANCE: 0.9980, 1.0050

BIAS: BULLISH

MOMENTUM: VOLATILE

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USD/CAD analysis for December 07, 2018

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Recently, the USD/CAD pair has been trading upwards. The price tested the level of 1.3444. Anyway, according to the H4 time – frame, I have found that price went above the Keltner upper band (overbought conditions) and then it moved back inside the Keltner channel, which is a sign that buying looks risky. I have also found a hidden bearish divergence on the LBR oscillator, which is anotther sign of weakness. Watch for selling opportunities. The downward targets are set at the price of 1.3335 and at the price of 1.3250.

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GBP / USD pair: plan for the US session on December 7. 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. The formation of a false breakdown in the area of 1.2752 led to a return in demand for the pound. However, the main task is to break through and fix above 1.2798 resistance, which will lead to an update of the larger 1.2833 border, where I recommend taking profits. The entire focus will be on data on the US labor market, as well as news on Brexit from the UK Parliament, which may appear at any time. In the case of a decline below the level of 1.2752, it is best to return to long positions to rebound from a minimum of 1.2702.

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

To open short positions requires the formation of a false breakdown in the area of resistance 1.2798 or return and consolidation below the support level of 1.2752. A good report on the US labor market will help the bears to derail the British pound to the lower border of the side channel 1.2702, where I recommend taking profits. In the case of a pair above the resistance level of 1.2798 in the second half of the day, the pound can be sold for a rebound from the maximum of 1.2833 and 1.2868, where the number of sellers is more concentrated.

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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EUR / USD pair: plan for the US session on December 7. The market is waiting

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

There are no serious new data, and the Eurozone GDP report did not lead to a change in the market situation. Traders paused before an important report on the number of people employed outside the agricultural sector. Buying requires the formation of a false breakdown in the area of 1.1360, with an exit and fixation above the resistance of 1.1388, where I recommend taking profits. In the case of a breakthrough and consolidation below the support of 1.1360, it is best to return to long positions to rebound from the lower boundary of the side channel 1.1324. However, much will depend in the afternoon on the labor market report.

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

Breakthrough and consolidation below the support of 1.1360 will lead to a larger sale of the euro with a return to the region of the lower border of the side channel 1.1324, where I recommend fixing the profit. In the case of the euro growth attempt, it is best to look at short positions on a false breakdown from resistance level 1.1388 or on a rebound from the upper limit of the side channel 1.1418 against the background of a weak report on the labor market.

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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GBP/USD analysis for December 07, 2018

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Recently, the GBP/USD pair has been trading sideways at the price of 1.2765. According to the M15 time – frame, I found out that price is trading above the daily pivot (1.2764), which is a sign that selling looks risky. I also found on the point and figure chart that there is a triple top formation created, which is another sign of strength. My advice is to watch for buying opportunities. The upward targets are set at the price of 1.2826 (resistance 1) and at he price of 1.2875 (resistance 2).

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USA: Brexit threatens global finance market

The two largest US regulators, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), are concerned about the possible negative consequences of the exit of Britain from the European Union, which may affect the global financial market.

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The SEC and CFTC called for the United Kingdom and the EU to ensure transparency and stability during Brexit in order to minimize risks for most financial companies. Representatives of both regulators believe that Brexit has influenced a number of US companies and investors. He believes that the risk to global markets has been underestimated.

According to Jay Clayton, head of the SEC, it will be difficult for the European Union and the UK to smooth out all the "roughness" of the transition period but it is necessary for long-term economic stability. Previously, Christopher Giancarlo, chairman of the CFTC, said about the possible instability in the global derivatives market amid Brexit. The Commodity Futures Trading Commission fears that changing the EU and UK rules on cross-border derivatives transactions will affect the global market for the worse.

Recall the following Tuesday, December 11, a discussion of the draft agreement between London and Brussels will be held in the House of Commons of Great Britain. At the same time, the vast majority of members of the Conservative Party do not support the plan of Prime Minister Theresa May. Many opposition representatives said they would oppose the deal.

Last week, the US Federal Reserve (FRS) voiced the position that Brexit without a deal is a short-term risk for America's financial system. The Fed believes that such a scenario would destroy the cross-border currency agreements and cast doubt on the financial prospects of the eurozone.

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BITCOIN Analysis for December 7, 2018

Bitcoin market has taken another strong downturn recently, leading the price to reside below $3,500 area quite impulsively. Bitcoin pushed downwards around 11% on the daily chart which was expected to push towards $4,000 and above recently as per recent fluctuations at the $3,500 support area. The market sentiment is currently quite bearish with Bitcoin. The digital currency is expected to pullback higher for a certain period and then sink lower towards $3,000 support area in the coming days. Last year at this day, Bitcoin surged higher quite impulsively to record highs that was also predicted to happen this year by certain speculators. However, the current formation in the chart suggests that the price might drop much lower in the short run. As the price remains below $4,000 area with a daily close, the impulsive bearish pressure is expected to continue.

SUPPORT: 2,850, 3,000, 3,250

RESISTANCE: 3,500, 4,000

BIAS: BEARISH

MOMENTUM: IMPULSIVE and SLIGHTLY VOLATILE

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Fundamental Analysis of NZD/USD for December 7, 2018

NZD/USD has been quite bearish recently after opening the market with a gap this week. The pair is trading lower below 0.69 with a daily close. Ahead of NFP reports, USD is currently quite indecisive whereas NZD is struggling for gains amid the recent economic reports. This may lead to downward momentum.

Recently New Zealand Overseas Trade Index report was published with a decrease to -0.3% from the previous value of 0.4% which was expected to be at 0.1% and ANZ Commodity Index report was published with an increase to -0.6% from the previous value of -2.4%. NZD is currently expected to stay low and stable, having already shed 3% of its value. The kiwi is expected to lose ground in the coming days, thus creating long-term pressure for the future.

On the other hand, USD has been stalled its growth amid the recent economic reports. As a result, the pair is trading indecisively with low liquidity. Ahead of the reports on the US labor market today, certain volatility may be observed on the USD side. Today US Average Hourly Earnings report is going to be published which is expected to increase to 0.3% from the previous value of 0.2, Non-Farm Employment Change is expected to decrease to 198k from the previous figure of 250k, and Unemployment Rate is expected to be unchanged at 3.7%. Though the expectations are mixed, certain optimistic bias can be observed in the market which might lead to certain gains on the USD side if better than expected economic figures are published today.

Meanwhile, USD may extend some gains ahead of upcoming NFP reports while New Zealand provides no economic data to deviate the upcoming pressure and bearish market bias. To sum up, USD is expected to gain certain momentum over NZD in the coming days.

Now let us look at the technical view. The price is currently quite indecisive but having certain bearish pressure below 0.69 and forming Bearish Divergence in the process, is expected to lead the price lower towards 0.6780-0.6800 support area before pushing higher towards 0.7050 in the future. As the price remains above 0.6700 area with a daily close, the bullish bias is expected to continue.

SUPPORT: 0.6700, 0.6780-0.6800

RESISTANCE: 0.69, 0.7050

BIAS: BULLISH

MOMENTUM: NON-VOLATILE

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Intraday technical levels and trading recommendations for EUR/USD for December 7, 2018

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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 is needed to enhance 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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Intraday technical levels and trading recommendations for GBP/USD for December 7, 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 this week.

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 achieved on lower timeframes quickly. Projected target for the bearish flag continuation pattern is initially located around 1.2600.

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Overview of the currency market on 12/07/2018

Such a feeling that market participants looked only at ADP data on employment yesterday, which actually turned out to be worse than forecast and made far-reaching conclusions regarding the content of the report of the Ministry of Labor published today. The fact is that employment increased by 179 thousand while the forecast was 195 thousand, whereas last month it increased by 225 thousand. In other words, the growth rate of employment slowed down a lot and this frightens many. However, if you look at unemployment benefits or rather their number, the picture is somewhat different as it fell by 78 thousand while they expected a decrease of 15 thousand. But in fairness, that ADP data has a slightly higher weight. It is also worth noting that the final data on business activity indices still showed a decline, although they turned out to be better than forecasts. Thus, the index of business activity in the services sector fell from 54.8 to 54.7, and not to 54.4. And the composite index fell not to 54.4 but to 54.7. The previous value is 54.9.

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The main event of the day will be the publication of the report of the US Department of Labor, and given the forecasts, as well as yesterday's ADP data, investors are not suited to it with the best feelings. On the one hand, indicators such as the unemployment rate, the average hourly wage, as well as, the average length of the working week should remain unchanged. However, the number of new jobs may decrease from 250 thousand to 200 thousand, which will confirm the ADP data on the slowdown in employment growth. This is an extremely negative factor and commodity stocks in the wholesale warehouses will increase the fears, as they should increase by another 0.3%. The last time the stocks were reduced only in October 2017 and since then they have been growing steadily, which is an extremely disturbing factor that threatens to turn into a crisis of overproduction.

In Europe today, only the final GDP data for the third quarter is released, which will confirm the fact of a slowdown in economic growth from 2.2% to 1.7%. Of course, the news is not the most joyful, but this development has long been taken into account by the market so that the single European currency will depend on American statistics. Thus, it is worth waiting for the growth of the euro to 1.1425 given the projections for the content of the report of the US Department of Labor.

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In the UK, Halifax data on housing prices will be published. the growth rate of which can slow down from 1.5% to 1.0% and at first it will negatively affect the pound. However, the market will only respond to US statistics, so the pound will be able to complete the week at 1.2800.

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AUD / USD: after the release of GDP, the Australian received a ticket to the south

The Australian dollar is actively cheaper for the fourth day in a row, having lost more than 150 points. Optimism about a possible truce between China and the United States has been replaced by pessimism about the growth of the Australian economy. The latest data on the growth of the country's GDP disappointed traders , and thus, moved all other fundamental factors faded into the background. Even a weakening US dollar does not save the position of aud / usd: the pair is confidently heading south, to the nearest target at the moment, 0.7190.

The report on the growth of the Australian economy is quite disappointing: in quarterly terms, GDP grew by only 0.3% - this is the weakest result in the past two years. In annual terms, the indicator continued its downward trend, reaching 2.8%. In the second quarter, GDP increased by 3% compared to the same period last year, while the initial estimate was at 3.4%. All these indicators were much worse than forecasts, causing a justified alarm for aud / usd traders.

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The fact is that the Reserve Bank of Australia literally on the eve of the disappointing release held its December meeting, at which he optimistic about the economic activity of the country. Thus, the head of the RBA, Philip Low, said that the regulator expects GDP to grow by 3.5% against the background of expanding investment and government spending on infrastructure development. The secondary preceding indicators indirectly confirmed the optimism of the head of the RBA. However, just the next day, the published figures of the key release "otrezvili" market participants.

The structure of published data suggests that Australian consumers have significantly reduced their costs due to weak wage growth. Consumer spending in the third quarter increased by 0.3%, while the average salary in July-September - only 0.2%. Such a symbolic increase in wages has a negative impact not only on the dynamics of GDP, but also on inflationary processes. In addition, household budgets are still under pressure due to rising debt: according to the latest data, Australia has one of the highest levels of household debt in the developed countries of the world. This problem has long been worrying members of the Australian regulator. Last year, one of them even proposed to soften the conditions of monetary policy in order to influence the situation.

At the moment, the regulator does not discuss the option of reducing the rate, but the big question now lies on the prospects for its increase. The baseline scenario assumes that RBA members will consider this issue at the end of 2019, at the end of the fall or at the December meeting. But if the Australian economy continues to show similar dynamics, the Central Bank will certainly shift this benchmark by 2020 (as the Reserve Bank of New Zealand has already done). For example, after the publication of the latest data, RBA bet futures suggest that the market has halved the likelihood of a rate hike at the December meeting of the Australian Central Bank. If earlier traders laid a 40 percent probability, now they are only 20% sure of this.

Naturally, this picture has a significant pressure on the Australian dollar, especially since the other fundamental factors are also negative. For example, the cost of iron ore - a strategically important raw material for the Australian economy - has been falling for several weeks in a row. If at the beginning of November, the ton cost 74 dollars, now it is being traded at around 65 dollars. The market is concerned about the decline in demand from the main trading partner of Australia - China. Moreover, according to experts, in the coming months, the demand for ore will show a downward trend. The imbalance of supply and demand will inevitably affect the pricing policy, which in turn will put pressure on the Australian dollar.

Against the background of such pessimism, the US-China trade negotiations faded into the background. The first emotions from the results of the G20 have passed, and now the financial world is frozen in anticipation of a broad trading deal. According to rumors, the negotiations of the parties are not going as smoothly and harmoniously as the leaders of the United States and China would like. For example, Donald Trump on his Twitter recently said that Beijing has agreed to lower tariffs on American cars. However, a little later, White House Economic Adviser Larry Kudlow denied this information. according to him, the relevant agreement does exist, but it has not been signed yet.

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Thus, a pair of aud / usd has a wide potential for further reduction - at least until such time as Washington and Beijing announce a breakthrough in negotiations. The weakness of the US currency in this context should be used as a pretext for opening short positions (in particular, if Nonfarma comes out worse than expected today). The nearest southern target is 0.7190, which corresponds to the lower boundary of the Kumo cloud on the daily chart. The next target is the mark 0.7165 - this is the bottom line of the Bollinger Bands indicator on the same timeframe.

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Simplified wave analysis of EUR / JPY pair for the week of December 7

Large-scale graph:

The wave construction of the H4 scale, leading from the end of May, remains unfinished. The first 2 parts are formed in the wave.

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Medium-scale graph:

The downward wave of September 21 underwent a correction on the trend segment of the main wave. The price increase that started after this has a chance to become the basis for the final phase of the wave trend.

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Small-scale graph:

The rising wave from October 26 develops mainly in the lateral plane. Given that this area is at the end of a large-scale bovine wave, the flat is necessary to increase the wave level of the current movement to the required value.

Forecast and recommendations:

In the near future, the beginning of the active growth phase of the pair is expected. The long preparatory period provides a good opportunity for supporters of different trading styles to enter long positions on the most favorable terms.

Resistance zones:

- 131.20 / 131.70

Support areas:

- 128.00 / 127.50

Explanations of the figures:

The simplified wave analysis uses 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 number of wave markings used by the author. While the dotted shows the formed movement.

Note: The wave algorithm doesn't take into account the duration of tool movements over time. To trade a trade transaction, you need to use signals!

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Forecast for GBP / USD pair on December 7, 2018

GBP / USD pair

On Thursday, the British pound grew by 49 points in anticipation of a positive outcome of the parliament voting on Brexit. on December 11. In the long run, we do not believe that the British currency can grow high since good conditions for a "divorce" will not accelerate the growth of the British economy (exactly the same as retaining as part of the EU). Soft Brexit is a purely psychological aspect of pound growth.

Currently, the price is above the embedded line of the price channel on the daily chart. The signal line of the Marlin oscillator touched the border with the territory of positive numbers (trend growth zone). and if you vote for the May-EU agreement, the potential growth of the pound can be to the upper priceline channel in the area of 1.3110. The first growth target is the MACD trend line resistance at 1.2966.

The negative scenario is a decline of the pound to the downstream line of the price channel at 1.2540. We do not drop from the account until the very moment of voting and the reaction of the British currency to it. Especially since we are adjusting our forecast due only to market expectations, our own conclusions and some optimism from the British media but what the decision of the parliament will be is still not clear.

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On the four-hour chart, Marlin indicates a rising trend and this trend has already moved the price above the trend indicator line and the balance line.

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The United States has become a net exporter for the first time in 75 years

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According to the US Department of Energy, for the first time in 75 years, the country has acquired the status of net exporter of oil and oil products.

Recall that a net exporter is called a state where more products, goods and services are exported abroad than it enters the country. In the United States, since 1943, more products have been imported than exported. This state of affairs has persisted over the past 40 years, experts emphasized. They called America a net importer, but now the situation has changed.

Previously, the United States experienced a shortage of hydrocarbons, respectively, imports in this area were quite high. However, with the increase in shale oil production, America has become one of the leading net exporters of black gold. The excess of exports of oil and oil products over imports recorded in the country last week reached 211,000 barrels per day.

According to experts, this year, net imports to the United States turned out to be higher than 2 million barrels per day. In 2018, American oil exports reached a record 3.2 million barrels per day, according to the US Department of Energy.

The current situation, favorable for the US economy, will remain subject to maintaining oil supplies at the current level from OPEC. If the countries of the cartel do not impose additional restrictions on oil production, America do not have to worry. US President Donald Trump also expressed the hope that OPEC will keep supplies of black gold at the current level. The United States is satisfied with the role of net exporter of oil and oil products, and once again become an importer--no longer wanted.

The exporter status is more favorable for economic development, experts emphasized. The prevalence of export volumes over imports raises the level of a country's GDP, which provides an economic boom. Imported resources are also a catalyst for the growth and development of many industries, analysts sum up.

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Wave analysis of GBP / USD for December 7. "Turbulence Zone" for Sterling

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Wave counting analysis:

During the bidding on December 6, the GBP / USD pair added 50 bp, but remains within the framework of the construction of the proposed wave a of the new corrective set of waves. Wave and can complete its construction at any time. On December 11, a vote will be held in the British Parliament on Brexit, after which it will be known which way the pair will "watch" in the coming months. An unexpected decision by a parliamentarian can lead to even more complication of the current wave marking and the need to make additions.

Shopping goals:

1.2935 - 50.0% Fibonacci

1.2991 - 38.2% Fibonacci

1.3175 - 0.0% Fibonacci

Sales targets:

1.2637 - 261.8% Fibonacci (senior grid)

1.2566 - 127.2% Fibonacci

General conclusions and trading recommendations:

The pair GBP / USD continues to build the downward wave a. However, an unsuccessful attempt to break through the 1.2695 mark, which corresponds to 100.0% of Fibonacci, that indicates the pair's readiness to build an internal correctional wave or not the readiness for a new fall. Thus, I do not recommend selling a pair before breaking through this level. Until December 11, I recommend to conduct extremely cautious trading, since the pound may be in the "zone of turbulence" until this date.

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Wave analysis of EUR / USD for December 7. Calm before the storm

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Wave counting analysis:

In the course of trading on Thursday, the EUR / USD pair gained several dozen points and thus remained within the framework of the construction of the proposed wave from the corrective trend section. The wave takes a very complex and unusual look. This is due to the expectation of a market for Brexit voting results in the UK Parliament. After it becomes clear what decision parliamentarians take, the wave pattern may take a clearer view. However, it may also require additions since the decision may be unexpected and definitely will not remain a strong market reaction.

Sales targets:

1.1215 - 0.0% Fibonacci

Shopping goals:

1.1471 - 100.0% Fibonacci

1.1528 - 127.2% Fibonacci

General conclusions and trading recommendations:

The pair continues to be in the framework of building an upward set of waves. Based on the current wave counting, I expect quotes to increase with targets located near the estimated 1.1471 mark. However, wave c may take a shorter look, and after December 11 all wave markings may change significantly. Thus, any deals for the pair should now be intraday in nature.

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Technical analysis for Gold for December 7, 2018

Gold price has made a new higher high yesterday but price is still stuck around the 38% Fibonacci retracement level. Price is challenging the short-term bullish channel. Trend remains bullish but a break below $1,220 would bring bears back in the game.

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Purple lines - bullish channel

Green line - major trend line support

Blue line - short-term trend line support

So far price is making higher highs and higher lows. As long as price is above the blue trend line support, we target $1,250-60 area. Bulls remain in control of the trend as long as price is above the green trend line. Breaking below this trend line would be a very bearish sign. Any pull back towards $1,225-30 is considered a buying opportunity with stops at $1,220-19 area. The 61.8% Fibonacci retracement level is an important target if bulls manage to stay above the 38% Fibonacci level.

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Simplified wave analysis GOLD for the week of December 7

Large scale graphics:

This year, the main vector of the price movement of gold sets the downward trend. The wave is not complete. In the recent months, the oncoming wave of correction has been developing in its framework.

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The estimated completion area is in the potential large-scale reversal zone.

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Forecast and recommendations:

In the coming weeks, supporters of short-term deals can take advantage of the expected continuity of the price growth. In the area of resistance, it is recommended to change the trading strategy and look for reversal signals.

Resistance zones:

- 1260.0 / 1265.0

Support areas:

- 1230.0 / 1225.0

Attention:

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Technical analysis for EUR/USD for December 7, 2018

EUR/USD continues to trade near the upper triangle boundary resistance at 1.1380-1.14. Short-term trend remains neutral as long as price remains inside the triangle pattern.

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Red lines - triangle pattern

EUR/USD has resistance at 1.1380-1.14 and support at 1.12 on a daily chart. Shorter-term support is found at 1.1310. If this level is broken, we expect price to move towards the lower triangle boundary at 1.12. Breaking below 1.12 would push prices even lower towards 1.08-1.09 at first. Breaking and closing above 1.14 would be a bullish sign that could push prices towards 1.15-1.16. Non-farm payrolls in the US are announced today and we expect volatility to rise after the news announcement. A break of resistance or support is highly likely today.

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Trading Plan 12/07/2018

Trading Plan 12/07/2018.

The big picture: There is no clarity with the direction yet.

Important news about the USA has been released - Fed Report "Beige Book" and ADP Employment Report for November.

But so far the market has not received directions.

Ahead, of course,- the vote of the EU-Britain agreement in the British Parliament (December 11) and the ECB meeting (December 13).

Perhaps, nevertheless, the market will start moving earlier.

Today, the Nonfarm employment report at 12.30 London time.

Pound: We are ready to buy from 1.2850.

But - we are ready to sell from 1.2650.

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Breaking Forecast 07/12/2018

Burning forecast 07.12.2018

EURUSD: Looking forward to breaking the range.

Important news on the US — the Beige Book Fed Report and ADP Employment Report failed to give the market a momentum of sufficient strength to get out of range.

Today, December 7, the Nonfarm payrolls report.

We are waiting for the breakthrough of the range and movement.

We are ready to buy from 1.1420, stop 1.1375, target 1.1620.

Alternative: Sell from 1.1304.

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GBP/USD: plan for the European session on December 7. Further growth for the pound is unlikely

To open long positions on GBP/USD, it is required:

The formation of a false breakout in the area of 1.2752, subject to the correction of the pair in the first half of the day, will be a signal to buy the pound, but the main task is to break through and consolidate above the resistance of 1.2798, which will lead to the renewal of a larger boundaries of 1.2833, where the entire emphasis will be on data on the US labor market, as well as news on Brexit from the UK Parliament, which may appear at any time. In case of a decline below the level of 1.2752, it is best to return to long positions to the rebound from the low of 1.2702.

To open short positions on GBP/USD is required:

To open short positions, a false breakout in the resistance area of 1.2798 or a return and consolidation below the support level of 1.2752 is required. A good report on the US labor market will help bears to pull down the British pound to the lower boundary of the side channel of 1.2702, where I recommend to take profit. If the pair rises above the resistance of 1.2798 in the first half of the day, it is possible to sell the pound on a rebound from the high of 1.2833 and 1.2868, where the number of sellers is more concentrated.

Moving averages

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

Bollinger bands

The volatility of the Bollinger Bands indicator is low, which does not give signals to enter the market.

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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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Technical analysis: intraday levels for EUR/USD, Dec 07, 2018

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When the European market opens, some economic data will be released such as the revised GDP q/q, Final Employment Change q/q, Italian Retail Sales m/m, French Trade Balance, French Industrial Production m/m, and German Industrial Production m/m. The US will deliver some economic data too such as the Consumer Credit m/m, Prelim UoM Inflation Expectations, Final Wholesale Inventories m/m, Prelim UoM Consumer Sentiment, Unemployment Rate, Non-Farm Employment Change, and Average Hourly Earnings m/m. So amid the reports, EUR/USD will move in a low to medium volatility during this day.TODAY'S TECHNICAL LEVELS:Breakout BUY Level: 1.1429.Strong Resistance:1.1422.Original Resistance: 1.1411.Inner Sell Area: 1.1400.Target Inner Area: 1.1373.Inner Buy Area: 1.1346.Original Support: 1.1335.Strong Support: 1.1324.Breakout SELL Level: 1.1317.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 carefullyconsider your investment objectives, level of experience, and riskappetite. The possibility exists that you could sustain a loss of someor all of your initial investment and therefore you should not investmoney that you cannot afford to lose. You should be aware of all therisks associated with foreign exchange trading, and seek advice froman independent financial advisor if you have any doubts.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Intraday levels for USD/JPY, Dec 07, 2018

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In Asia, Japan will release the Leading Indicators and Household Spending y/y. The US will release a batch of economic data such as Consumer Credit m/m, Prelim UoM Inflation Expectations, Final Wholesale Inventories m/m, Prelim UoM Consumer Sentiment, Unemployment Rate, Non-Farm Employment Change, and Average Hourly Earnings m/m. Amid the reports of cricual importance on the US labor market, the USD/JPY pair is set to trade with medium to high volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance 3: 113.28

Resistance 2: 113.06

Resistance 1: 112.84

Support 1: 112.57

Support 2: 112.35

Support 3: 112.13

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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Elliott wave analysis of EUR/NZD for December 7, 2018

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EUR/NZD has rallied nicely as wave iv. Wave a of iv likely completed with the test of 1.6575 and we should expect a temporary set-back close to 1.6423 before the next rally higher to at least 1.6668 and ideally closer to 1.6767 before being ready to turn lower in wave v.

Short-term a break below minor support at 1.6511 will call for a dip to 1.6469 and ideally closer to 1.6423 in wave b of iv.

R3: 1.6620

R2: 1.6575

R1: 1.6547

Pivot: 1.6511

S1: 1.6469

S2: 1.6423

S3: 1.6395

Trading recommendation:

We are long EUR from 1.6400 and we will move our stop higher to 1.6510 and if done, we will try to re-buy EUR at 1.6435.

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Elliott wave analysis of EUR/JPY for December 7, 2018

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EUR/JPY remain indecisive in the 127.60 - 128.46 range and could move slightly higher to 128.50 before tuning lower again towards minimum 125.75 and ideally closer to the long-term ideal target at 123.66 to complete the 10 year triangle consolidation.

Only an unexpected break above resistance at 129.05 will invalidate our bearish outlook.

R3: 128.50

R2: 128.20

R1: 128.08

Pivot: 127.68

S1: 127.60

S2: 127.23

S3: 126.62

Trading recommendation:

We sold EUR at 128.05 and we will place our stop at 129.10.

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NZD/JPY Bounced Off Support, Prepare For A Further Rise

NZD/JPY bounced nicely off its support at 77.34 (100% Fibonacci extension, 61.8% Fibonacci retracement, horizontal overlap support) where it could potentially bounce to its resistance at 77.94 (50% Fibonacci retracement, horizontal pullback resistance).

Stochastic (89, 5, 3) is bounced off its support at 5.8% where a corresponding rise could occur.

NZD/JPY bounced nicely off its support where we expect to see a further rise.

Buy above 77.34. Stop loss at 76.83. Take profit at 77.94.

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AUD/CAD Approaching Support, Prepare For A Bounce

AUD/CAD is approaching its support at 0.9650 (100% Fibonacci extension, 50% Fibonacci retracement, horizontal overlap support) where it could potentially bounce to its resistance at 0.9698 (61.8% Fibonacci retracement, horizontal swing high resistance).

Stochastic (55, 5, 3) is approaching its support at 7.9% where a corresponding bounce could occur.

AUD/CAD is approaching its support where we expect to see a bounce.

Buy above 0.9650. Stop loss at 0.9613. Take profit at 0.9698.

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AUD/CAD Approaching Support, Prepare For A Bounce

AUD/CAD is approaching its support at 0.9650 (100% Fibonacci extension, 50% Fibonacci retracement, horizontal overlap support) where it could potentially bounce to its resistance at 0.9698 (61.8% Fibonacci retracement, horizontal swing high resistance).

Stochastic (55, 5, 3) is approaching its support at 7.9% where a corresponding bounce could occur.

AUD/CAD is approaching its support where we expect to see a bounce.

Buy above 0.9650. Stop loss at 0.9613. Take profit at 0.9698.

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AUD/CAD Approaching Support, Prepare For A Bounce

AUD/CAD is approaching its support at 0.9650 (100% Fibonacci extension, 50% Fibonacci retracement, horizontal overlap support) where it could potentially bounce to its resistance at 0.9698 (61.8% Fibonacci retracement, horizontal swing high resistance).

Stochastic (55, 5, 3) is approaching its support at 7.9% where a corresponding bounce could occur.

AUD/CAD is approaching its support where we expect to see a bounce.

Buy above 0.9650. Stop loss at 0.9613. Take profit at 0.9698.

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EUR/USD: plan for the European session on December 7. Traders are waiting for data on the US labor market

To open long positions on EURUSD you need:

All the attention of traders today will be focused on data on the GDP of the eurozone and the US labor market. The direction of the market will depend on them. For purchases, it is required to form a false breakout in the area of 1.1360, with the exit and consolidation above the resistance of 1.1388, which opens a direct road to the upper border of the side channel of 1.1418, where I recommend taking profit. In the event of a breakthrough and consolidation below the support of 1.1360, it is best to return to long positions on the rebound from the lower border of the side channel of 1.1324, but much will depend on the eurozone GDP report in the first half of the day.

To open short positions on EURUSD you need:

A break and consolidation below the support of 1.1360 will lead to a sharper selling of the euro with a return to the area of the lower border of the side channel of 1.1324, where I recommend taking profit. In case of an attempt for the euro to increase against the background of a good report on the eurozone GDP, short positions are best seen on a false breakout from the resistance level of 1.1388 or on a rebound from the upper limit of the side channel of 1.1418.

Indicator signals:

Moving averages

Trading is conducted in the area of 30-day and 50-day moving averages, but the market volatility is very low, which indicates the lateral nature of the market.

Bollinger Bands

In case of an upward movement, the upper limit of the Bollinger Bands indicator in the area of 1.1400 will act as a resistance. At the first test of the lower border of the channel in the area of 1.1348, there may also be a slight rebound of the euro upwards.

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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

Forecast for EUR/USD for December 7, 2018

EUR/USD

Thursday, technically and ideologically, became a tipping point in market sentiment regarding Brexit. Pending the adoption by the British Parliament of the "May Project", the dollar weakened visibly relative to major world currencies. Since Brexit is also important for Europe, the euro added 31 points. The growth is small, but it occurred at high volumes (there was a struggle with the "bears") and on the daily chart the price went above the balance line. On the four-hour chart, the price fixed above the balance line and above the Krusenstern line – the indicator trend line. The Marlin oscillator indicates rising trend in both graphs.

Earlier, we thought that by adopting the "May Project", the pound and the euro could decline "by fact", but it seems that the rising potential of European currencies as an indicator of a positive assessment of "soft Brexit" has not yet been exhausted.

Against this background, emotional assessments of the Fed's prospects for monetary policy may change. Yesterday, the head of the Federal Reserve Bank of Atlanta Raphael Bostic said that the rates are close to neutral. Probably, the Fed really thought about the problem of the rise in the cost of public debt service, and it may be that next year the rate will be raised only once.

In the long term, we continue to adhere to the scenario of strengthening the dollar, as geopolitical and macroeconomic factors can support the demand for the US currency for a long time, but in the medium term the Brexit issue has not yet been played out.

Yesterday, ADP data on jobs in the private sector showed an increase of 179,000 jobs against 225,000 in October. The media immediately published materials about the saturation of the labor market, although the indicator is quite high, which has the potential for a rather slow compression. Today there will be data on jobs in the non-agricultural sector of the economy - a forecast of 198,000 against 250,000 the previous month. The expected figure is definitely high, but it will now become much easier to "discredit" it. These are all signs of a set of measures aimed at the medium-term weakening of the dollar. Probably for the period of the most comprehensive repayment of public debt.

So, today's market reaction to employment data in the US will be an even more suggestive indicator of investors' attitude to the decision of the British Parliament on Brexit.

We expect the growth of the euro to 1.1472 (Krusenstern line on a daily basis and the same peak on November 20) and further to 1.1621 (high on October 16).

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