December ECB meeting: preview

The last meeting of the European Central Bank this year will be held in the context of political tensions, economic uncertainty, and market volatility. The epidemic of "yellow vests" protests is no longer confined to France. Literally today, protesters blocked one of the most important roads in Poland by staging an unauthorized rally. By the way, the French "revolution" is still not subsiding. According to the European press, tomorrow in Paris, a vote will be held on a vote of no confidence in the French government.

Cn33sh8JyUHdwybsudNTPw-XttBi8rr_k-3iDY63In Britain, a similar issue will be considered today. Approximately at 20:00, the British parliament will vote to issue a vote of no confidence in Prime Minister Theresa May. 316 deputies from the Conservative Party should take part in the vote. If the majority of them vote against the current prime minister, the conservatives will have to elect a new leader. The law will set aside a three-month period for this. Having lost the status of the leader of the Conservative Party, Theresa May will lose the post of prime minister, respectively. There is also a downside. If the conservatives support it, then it will receive annual immunity from such votes. Many representatives of the Tory have already expressed their support for May (according to preliminary data, about a hundred deputies), but the intrigue in this matter still remains, just as in the issue of the prospects of Brexit.

The British Prime Minister is now unsuccessfully trying to convince her European colleagues that they need to provide London with guarantees regarding the timing of the back-stop. Apparently, this issue will be discussed already at the EU summit, which will begin its work tomorrow. The fate of the "soft" Brexit largely depends on the position of Brussels, because the issue of the Irish border is a key stumbling block for many British parliamentarians. Here, it should be recalled that on December 20, the deputies leave for a prolonged vacation (until January 7), so if the members of the Alliance do not accept the appropriate compromise solution, the consideration of this issue will be postponed to mid-January.

Naturally, such a high degree of uncertainty will exert strong pressure on the members of the ECB. Moreover, in addition to the above problems, there is also the Italian question, which also hangs in the air. The budget epic is accompanied by numerous rumors that often contradict each other. Literally this morning in the press, there was information that Rome is not ready to significantly change the parameters of its budget. However, in the second half of the day, a different inside appeared, allegedly Italians agreed to cut the budget deficit to two percent. If this information is confirmed, the European Commission is very likely to agree on the draft Italian budget and the months-long conflict will be settled. Here, it is worth noting that over the past weeks, such signals (false) have entered the market more than once. Therefore, it is too early to talk about resolving the Italian problem.

Summing up the year, members of the ECB will not be able to ignore the fact of slowing down of key macroeconomic indicators. Let me remind you that the consumer price index fell to two percent, with a forecast of growth to 2.1%. Core inflation, excluding volatile energy and food prices, returned to one percent, although experts were confident that the indicator would remain at the October level, that is, at around 1.1%.Z6D7z67mv-eMKPNQCK-a-i4aG9VimvyCj93KoBokWfj4YHUUto2BoPvjow3uOg7Z1tkkbZsB2pL8VQVHGerman inflation also disappointed traders. The consumer price index has been falling there for the second month in a row, having reached one-tenth of a percent in November. Germany is considered the "locomotive" of the European economy, so these figures are a very alarming signal. The unemployment rate in the eurozone also "let down". The figure remained at the level of the previous two months, that is, at around 8.1%. And although the negative dynamics is minimal, the trend itself is disturbing, especially in light of the slowdown in eurozone GDP and Mario Draghi's pigeon comments.

After all, if we consider the release on inflation in the aspect of the rest of the reporting, then the overall picture is quite negative. For example, previously published PMI indices in European countries are in the red zone, reflecting the deterioration of the situation in the manufacturing and services sectors. In particular, the eurozone manufacturing PMI fell to 30-month lows, while the German similar indicator updated the annual minimum. These figures are consistent with the slowdown in economic growth in the Eurozone, which was recorded in the third quarter of this year. GDP growth in the Eurozone slowed down to four-year lows.

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Given the above, members of the ECB tomorrow may sound softer rhetoric about the prospects for monetary policy next year. It is not excluded that the regulator will transfer the approximate date of the rate increase for 2020. In this case, the euro will be under pressure throughout the market. However, such a scenario is rather improbable. The European regulator now has no need for excessive volatility in the markets. Most likely, the ECB will take a cautious and "tacit" position regarding the prospects for monetary policy.

Thus, the basic scenario of tomorrow's meeting includes several items. First, the regulator will "officially" end the incentive program. Secondly, the ECB will slightly lower its growth forecasts, but at the same time declares that the risks in the eurozone economy are "balanced". Thirdly, he will talk about reinvestment and the prospects of a new round of TLTRO. In general, if Mario Draghi does not "transfer" the approximate rate increase date to 2020, the regulator can support the European currency, primarily because the market initially does not expect any "hawkish" notes from the ECB against the background of recent economic and political developments.

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GBP / USD pair: plan for the US session on December 12. Pound may increase as Brexit news arrives

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

The formation of a false breakdown at the support level of 1.2482 happened, which I drew attention in my morning forecast that led the GBP / USD to the area of large resistance 1.2534. For the second half of the day, the main task of buyers will be a breakthrough and consolidation above this resistance, which will lead to a large upward correction to the highs of 1.2580 and 1.2626, where I recommend taking profits. In the case of a repeated decline of the pound to the support area of 1.2482, a breakdown may occur. In this scenario, it is best to consider long positions after testing the lows around 1.2454, 1.2429 and 1.2405.

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

So far, sellers have managed to form a false breakdown at the resistance level of 1.2534, however, a major decline in the pound did not occur. As long as the trade is below this range, the pressure on GBP / USD will continue. A repeated decline in the support area of 1.2482 may lead to a larger sale of the British pound with updated lows around 1.2454 and 1.2429, where I recommend taking profits. The main weekly target will be the area 1.2405. In the case of a larger upward correction and a breakthrough resistance of 1.2534. But for the time being all this goes, to short positions you can look at the rebound from the maximum of 1.2580 and 1.2626.

Indicator signals:

Moving averages

Trade is conducted under the 30- and 50-day moving averages, which indicates a continued decline in the pound.

Bollinger bands

In the case of a decrease in the pound in the afternoon, long positions can be considered immediately to rebound from the lower limit of the Bollinger Bands indicator around 1.2482, which acts as support.

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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 12. Traders waiting for thw US Inflation Data

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

In the first half of the day, euro buyers managed to stay above the support level of 1.1320-1.1310 and form a false breakdown there. As a resulted, there was an increase in the area of larger resistance 1.1341, which I paid attention to this in my morning forecast. Only a fixation above the area of 1.1341 will create a good signal to buy the euro in order to update the maximum of 1.1370, where I recommend taking profits. In the afternoon, you need to pay attention to data on inflation in the United States, which may lead to a larger increase in the US dollar. In case of EUR / USD decline, I recommend returning to long positions from the support level of 1.1293 or to the rebound from 1.1268.

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

The bears failed to break below the support of 1.1310 and their main task at the moment is to keep the resistance area of 1.1341. Forming a false breakout at this level , which may coincide with the release of data on inflation in the US, will be a good signal to sell the euro. Also, a fixation below the support of 1.1310 already in the afternoon will lead to a larger downward trend, with an update of 1.1293 and 1.1268 lows, where I recommend to take profits. In the case of a release of poor fundamental statistics for the US and EUR/USD growth above 1.1341, short positions can be opened on a rebound from the maximum of 1.1370.

Indicator signals:

Moving averages

Trade is conducted under the 30- and 50-day moving averages, which indicates the formation of a downward trend.

Bollinger bands

If the euro declines in the second half of the day, the Bollinger Bands indicator at 1.1314 will provide good support, a breakdown of which will lead to a big euro sale.

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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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The US may lose its leadership in the global energy market

According to experts, the dominance of the United States in the energy sector is currently under threat. Experts believe the reason for this is protracted trade conflicts with China and other countries.

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Analysts believe that a full-scale confrontation between the United States and China creates considerable difficulties for the effective development of America's energy industry. Trade conflicts threaten the plans of US President Donald Trump to achieve for the country the status of the main exporter of hydrocarbons.

Over the past ten years, energy has acted as a catalyst for the effective development of the United States economic sector. Innovative technologies of the country contributed to the growth of natural gas production by 60%. Thanks to Washington, the trade deficit in the industry has successfully dropped by more than 75%. According to economists, the American economy benefited from this about $ 250 billion a year.

According to analysts, America's dominance in the global energy market could end the protracted trade war with China. Earlier, the White House introduced high protective duties on aluminum and steel imported from the Middle Kingdom. Experts emphasized that in this situation, the US oil and gas structures have lost the necessary inexpensive raw materials for the construction of pipelines. As a result, US manufacturers can not provide 100% of all the needs of power, experts say.

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What will replace the Fed rate?

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On Wednesday, December 12, it became known that the US Federal Reserve (Fed) plans to replace the key rate. Experts are trying to understand the reasons for this step.

In the US Central Bank, a discussion of a possible alternative to the Fed rate began. Analysts do not exclude that such changes may adversely affect financial markets.

At the November meeting, representatives of the Open Market Operations Committee (FOMC) proposed two alternatives that are in many respects diametrically opposed. One of them is the creation of an interbank lending market, the second is the development of the arbitration sphere.

Before the 2008 financial crisis, the Fed used open market operations to manage the shortfall in reserves available for lending. It was necessary to control the rate of federal funding. This rate is higher on the importance of the target rate of the regulator. This is a market where financial companies provide short-term loans from reserves held on deposits of the Federal Reserve Bank (FRB) of New York.

Currently, market dynamics have changed, and the policy of quantitative easing has contributed to the emergence of new impressive reserves for banks. This reduced the need to attract interbank loans, experts say.

From time to time on the accounts in the Central Bank, excess reserves remain, and the Fed has the right to pay interest on them to some market participants. Banks that do not have such privileges, began to provide loans below the IOER rate paid by the Fed. This situation contributed to the emergence of arbitration for a number of companies. They could borrow at a rate close to the effective federal funding rate, and then place funds in the New York Fed on IOER.

In the course of reducing the balance of the Fed, the amount of liquidity in the financial system began to decrease, analysts say. Many market participants believe that the volume of bank reserves may be insufficient. At the same time, the active placement of treasury securities and the growth of yield pushed up other key short-term rates, especially on the repo market. This put upward pressure on the rate of federal funding noted in the agency Bloomberg.

According to the New York Fed, the daily cash flow in the current quarter fell to $ 64 billion, although it used to be hundreds of billions of dollars. In the current situation, representatives of the regulator suggested targeting the one-day bank funding rate (OBFR) rather than federal funding.

Fed officials stressed the similarities of the OBFR and the federal financing rates, believing that in this connection no major changes in monetary policy would be required. Stabilization of the situation is possible if the central bank switches to OBFR targeting, analysts say.

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Fundamental Analysis of EUR/JPY for December 12, 2018

EUR/JPY has been volatile and corrective in the price range of 127.50 to 130.00 from where it is expected to push lower in the coming days. Despite a series of worse economic reports published recently in Japan, JPY has made impulsive bearish price swings that indicates EUR's weakness.

EUR has been hurt by Italy's budget deficit issue for a few weeks in a row. Italy has not suggested a better solution on the draft budget. As a result, EUR bulls lost faith in further EUR growth. Moreover, BREXIT deal is also derailing EUR's advance. Recently, ECB President Draghi has been quite positive in his speeches about the eurozone's economic outlook. Besides, some upbeat economic reports contributed to overall gains of EUR. Today Italian Quarterly Unemployment Rate report was published with a positive result of a decrease to 10.2% from the previous value of 10.7% which was expected to be at 10.3% and the eurozone's Industrial Production increased to 0.2% as expected from the previous value of 0.6%.

On the other hand, due to recent Financial Sector issues and worse economic results, JPY has been undermined by the recently published economic reports. If more downbeat reports from Japan follow, JPY will lose ground. Today Japan's Core Machinery Orders report was published with an increase to 7.6% from the previous negative value of -18.3% which unfortunately failed to meet the expected score of 10.2%, PPI decreased to 2.3% from the previous value of 3.0% which was expected to be at 2.4%, and Tertiary Industry Activity increased to 1.9% from the previous value of -1.2% which was expected to be at 0.9%. Ahead of Tenkan and Revised Industrial Production report this week, JPY is currently quite short of positive economic results to dominate EUR.

Meantime, EUR is currently quite optimistic with the economic reports despite the recent political developments. On the other hand, JPY has been hurt by the economic data. If Japan fails to publish solid reports, EUR is expected to continue a further rally. Nevertheless, any positive news from Japan may lead to continuation of the bearish pressure in the pair again with ease.

Now let us look at the technical view. The price has been quite volatile but impulsive with the recent bullish momentum which lead it to reside above the Kumo Cloud resistance with an impulsive break. The price is currently residing above 128.50 area from where it is expected to push higher towards 130.00 resistance area in the coming days. As the price remains above 128.00 area with a daily close, the bullish pressure is expected to continue. Otherwise, a break below 128.00 may lead the price lower towards 125.50 support area in the distant future as the overall bias of this pair is still bearish.

SUPPORT: 125.50, 127.00-50, 128.50

RESISTANCE: 129.50, 130.00

BIAS: BEARISH

MOMENTUM: VOLATILE

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Gold plays by the rules of the Central Bank

Having reached a five-month high, gold failed to gain a foothold above the psychologically important mark of $ 1,250 per ounce due to strong statistics on American producer prices. In November, the base indicator accelerated to 2.7% y / y, which immediately brought back the idea of continuing the Fed's monetary policy normalization cycle in 2019 on the table. The day before, the derivatives market reduced the chances of a single increase in the federal funds rate to 49%, but strong PPI pushed them to the level of 57%. The dollar came to itself, which made the bulls in XAU / USD retreat.

Since mid-November, the main driver of the growth of the precious metal is the change in the worldview of the Fed. Jerome Powell said that the level of neutral interest rates is close, which led investors to doubt the realism of the September FOMC forecasts. Currently, the market is counting on one or two acts of monetary restriction in 2019 instead of three. Simply put, investors do not like the dollar because of the possibility of deterioration in the forecasts of the Central Bank in December. At the same time, Jerome Powell said that further decisions by the regulator will depend on the incoming data so that strong statistics on producer prices quite naturally led to the strengthening of the USD index.

Despite the retreat, banks represented by JP Morgan, BofA Merrill Lynch, and Commerzbank are optimistic about the medium and long-term prospects for gold. The precious metal may grow by 5% -15% in 2019 due to the slowdown in the process of monetary restriction of the Fed, difficulties in financing the US double deficit, falling stock indices and the yield of treasury bonds.

Dynamics of gold and yield of US Treasury bonds

G55XOhmXkinWjbRQMJI5gpdI78yBgXmQ9etvpqZtLet's not forget about the favorable external background for gold. Despite the truce in the trade wars of Washington and Beijing, in 90 days it is fully capable of resuming. In addition, the uncertainty associated with the negotiations will keep the demand for safe-haven assets at a high level. The Italian budget crisis is far from resolved, and Britain risks plunging into the promiscuous Brexit. It is not surprising that in such conditions, stocks of specialized exchange-traded funds are growing. For the largest of them, SPDR Gold Shares, the figure increased to 763.56 tons, the maximum level since the end of August.

Further XAU / USD dynamics will depend on releases of data on US inflation, European business activity and on the outcome of the ECB meeting. The slowdown in CPI, Mario Draghi's confidence in restoring the eurozone economy despite current weak statistics and the gradual growth of purchasing managers' indexes will inspire EUR / USD bulls to attack, which will affect the USD index and gold. On the contrary, the acceleration of inflation, the weakness of PMI and the readiness of the European Central Bank to extend QE will strike at the main opponent of the dollar. The euro, which will force the precious metal to retreat.

Technically, the bulls leave no hope to realize a target of 200% using the AB = CD pattern. The situation is under their control, so it makes sense to use kickbacks to support at $ 1239 and $ 1230 per ounce for purchasing.

Gold, the daily chart

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Theresa May can resign tonight

Teresa May can resign tonight.

Forty-eight deputies from the Conservative Party (May Party) signed a demand for a vote of confidence in the May Government.

The regulation requires a vote on such a request.

If there are more than half of the voters against May, the May government can no longer exist by Wednesday night.

Voting is expected from 6:00 pm to 8:00 pm London time.

It is clear that this is the result of the pushing by May of her version of the agreement with the EU. Critics are attacking May from two sides: Radicals from Brexit supporters are unhappy with too strong regulations from the EU and laid down in an agreement with the EU.

On the other hand, the opponents of Brexit are against the agreement since they are in favor of a new referendum, which cancels the exit of Britain from the EU.

We are waiting for results from London to the night.

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Brexit: Conservative Party leader Theresa May can be dismissed tonight

The British pound survived another shock and almost fell below yesterday's lows after news broke that a process was launched today leading to a vote of no confidence in British Prime Minister Theresa May.

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This news received real confirmation. Tonight, members of the Conservative Party of Great Britain are expected to discuss whether Theresa May can continue supporting her or send her out. As it became known, 48 representatives of her party sent letters of no confidence to a special committee chaired by Graham Brady. It was he who confirmed the information about the upcoming voting.

The importance of the problem lies in the fact that if the majority of parliamentarians from the Conservative Party vote against May, it will be necessary to choose a new leader, which will take at least a couple of weeks, if not more, which the UK doesn't have.

On the other hand, if May gets support, and most analysts agree on this, her leadership will not be able to be challenged for one year, which will strengthen her position and allow Brexit to look at it without thinking.

Immediately after the above news appeared, the British Prime Minister made a statement. According to May, she will with all her strength resist the vote of no confidence, even despite the fact that in the negotiations on the guarantee of the absence of a rigid border in Ireland, there is progress that is needed to conclude a Brexit deal. Theresa May also noticed that a change of leader creates uncertainty at a time when she is least needed, which will undermine the Brexit process.

And indeed, if May leaves his post, it remains to be seen who will be the new leader and how he will negotiate on Brexit, the deadline for which is March 29, 2019.

As for the technical picture of the GBP / USD pair, surprisingly, after the release of the above news, the pound tried to break below support at 1.2480, but the bears did not succeed. The confidence that May will remain at her post forces traders to consider long positions on the pound, and any solution to the problem with the Irish border will give a powerful impetus to the purchases of the British pound. Fixation above the resistance of 1.2540 is a good signal for bulls, putting on the restoration of the trading tool. However, the upward trend may be limited by large resistance levels of 1.2580 and 1.2630.

The data, which came out in the eurozone in the first half of the day, supported the European currency, although this did not affect the overall situation in the pair.

According to the report, industrial production in the eurozone increased in October this year after a major decline in September amid a slowdown in economic growth. Thus, industrial production grew by 0.2% in October, after falling by 0.6% in September. Compared to the same period of 2017, production increased by 1.2%. Economists had expected that industrial production in the eurozone in October would grow by 0.3% and 0.8%, respectively.

As for the technical picture of the EUR / USD pair, it remained unchanged. It is likely that pressure on the euro will continue. The breakthrough of intermediate support in the area of 1.1320 will lead to a new wave of short positions with access to the lows of last month in the area of 1.1290 and 1.1265. An upward correction will be limited to the levels of 1.1350 and 1.1370.

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Simplified wave analysis of EUR / CHF pair for the week of December 12

Large-scale graph:

The promising direction for the coming months of this cross is set by the wave model of September 7. In its structure, the middle part (B) is close to completion.

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Medium-scale graph:

The descending wave from October 22 reached the upper boundary of the preliminary target zone. The wave looks complete. Signal reversal is not observed.

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Small-scale graph:

From November 30, the price forms the downward wave section of the hourly timeframe. The upper limit of the potential reversal zone has been reached.

Forecast and recommendations:

In the coming days, the most likely prospect will be lateral flat on the cross-over chart. Before the upcoming change in the short-term course of the pair, you need to wait for the confirming reversal signals.

Resistance zones:

- 1.1340 / 1.1390

Support areas:

- 1.1230 / 1.1180

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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Pound shows signs of life. What does it mean?

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The lack of positive on the issue of Brexit, in particular, the Theresa May negotiations with officials in Europe, continues to put pressure on the pair pound / dollar.

The risk of its further weakening remains elevated due to the possible presence of mistrust to British Prime Minister Theresa May. This will increase the uncertainty factor and, as a result, can provoke a powerful fall in the pound across the entire spectrum of the market.

Meanwhile, today, the pound managed to rebound from a 20-month low against the dollar, after it became known that some ministers continue to support Theresa May.

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In early European trading, the quotes for the GBP / USD pair fell to 1.2475, the smallest level since April 11, 2017. The weakness of the sterling is due to the statement of the chairman of the committee of the House of Commons, Graham Bradley. The politician confirmed receipt of 48 applications, which is more than 15% required to conduct a vote on the no-confidence vote of the British Prime Minister.

Voting will take place on Wednesday from 16:00 to 18:00. Counting votes and an announcement of results will also be made today, sources said.

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In order to maintain its leading position, May needs to enlist the support of the majority of the 315 deputies. If the minority is on its side, the struggle for a new leader will begin and Theresa May will be prohibited from participating in it.

In the event of a loss, May, the next British Prime Minister, whoever he is, will be forced to suspend the implementation of Article 50, on the basis of which Britain could withdraw from the European Union on March 29, reports the BBC television channel.

May's party is chosen by Foreign Minister Jeremy Hunt, Interior Minister Sajid Javid, and Minister of Health Matt Hancock, who called on parliamentarians to support the country's current prime minister.

Chancellor of the Treasury Philip Hammond, along with her supporters also Minister of Labor and Pensions Amber Rudd and Minister of Justice David Gock, remain in solidarity with May.

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Analysis of Bitcoin for December 12, 2018

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Trading recommendations:

According to the H1 time frame, I found that BTC broke out of the downward channel in the background, which is a sign that buyers took control from sellers. I also found the rejection of the support trend line, which is another sign of the strength. My advice is to watch for buying opportunities. The upward targets are set at the price of $3,510 and $3,667.

Support/Resistance

$3.510 – Intraday resistance

$3.255 Intraday support

$3.510 – Objective target 1

$3.667 – Objective target 2

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

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Analysis of GBP/USD for December 12, 2018

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Recently, the GBP/USD pair has been trading downwards. The price tested the level of 1.2476. Anyway, according to the M15 time frame, I found a fake breakout of yesterday's low at the price of 1.2480, which is a sign that selling looks risky. I also found that the price is trading above the daily pivot (1.2534), which is another sign of the strength. Watch for buying opportunities. The upward targets are set at the price of 1.2587 and 1.2638.

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Euro and pound are falling against the background of increasing political risks

According to a ZEW, the German economic index of investor confidence in December increased from -24.1p to -17.5p, which is a good sign after a long period of decline in the negative area. For the eurozone, the same indicator also slightly improved with -22p. to -21p, however, the overall assessment of the economic situation worsened for both the German economy and the eurozone.

It is also necessary to take into account additional factors, such as higher energy prices and political risks in France and Italy. In general, the growth rate of the eurozone has clearly slowed down, partly due to the natural recoil from a very strong export growth in 2017 at the level of 5.4%. Partially, the decline in exports was due to the tightening of external conditions, such as the trade war between the United States and China. Also, it is due to the general slowdown in the growth of the global economy. The decline in exports led to a slowdown in the manufacturing sector and then in the services sector, which affected the business confidence.

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It is also necessary to take into consideration the additional factors, such as higher energy prices and political risks in France and Italy.

Nevertheless, it is obviously premature to assume a quick recession, primarily because of the persistently high level of average wages in the eurozone, which will help maintain high domestic demand. The growth of private consumption will also be promoted by labor shortages, which will lead to improvements in the labor market and a decrease in unemployment.

The challenge facing the ECB looks complicated but not insoluble. The regulator needs to gently complete the asset repurchase program, this action is expected by the market and will not cause strong movements. At the same time, it is necessary to prevent a strong growth of the euro, especially against the background of the expected decline in the US dollar, and to maintain support for the economy next year, where a program to reinvest some of the programs in the framework of LTRO2 may be announced.

On Wednesday, EUR/USD pair will remain under slight pressure and will trade in a range with a tendency to move to its lower boundary. The immediate goal is 1.1265 with a fall in support which will open the way to 1.1215 but such a strong decline is unlikely until Thursday.

Great Britain

The unemployment rate in the UK is stable and amounted to 4.1% in August-October, which coincided with the value a month earlier. Taking into account the premiums, the average wage rose to 3.3% against 3.1% a month earlier that turned out to be much better than forecasts of experts who expected a decline.

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Strong data on wage growth combined with a slowdown in inflation indicate a growth in real incomes of the population, which is a strong bullish factor for the pound. However, the markets did not respond to the release of positive data, since all their attention focused on the political situation associated with Brexit.

European Commission President Jean-Claude Juncker said on Tuesday that the terms of the agreement on leaving the UK from the EU are not subject to change. Thus, disavowing Theresa May's statement that she would use the deferment of voting in Parliament for new negotiations with Brussels.

Thus, chances of Theresa May in parliament's approval of the terms of the deal have been significantly reduced and she herself faces an obvious threat of resignation. The situation in the UK is a dead end since a change in the agreement is impossible and its adoption can cause a new political crisis associated with the status of Ireland and Scotland in the British alliance.

The dynamics of GBP/USD pair until the end of the week will be determined by technical factors and the development of the political situation since no important macroeconomic data are expected. The pound did not find grounds for corrective growth to the level of previous support of 1.2660, which means that the downward impulse is strong and should not be expected to stop falling. The immediate support will be at 1.2440 and then to 1.2228, and the pound can get attain it before the end of the week.

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Intraday technical levels and trading recommendations for GBP/USD for December 12, 2018

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Since mid-November, the GBP/USD pair failed to establish a successful bullish breakout above the price level of 1.2880 (the upper limit of the depicted consolidation range).

On the other hand, two unsuccessful bearish breakout attempts were demonstrated below 1.2720 during last week's consolidations.

During Friday's consolidations, the GBP/USD pair failed to fixate above 1.2780 (79.6% Fibonacci). That's why, a significant decline was demonstrated below 1.2700-1.2660 (Historical bottoms) yesterday.

The current scenario could pursue as a bearish flag continuation pattern provided that bearish persistence below 1.2660 (corresponding to a prominent daily low) is maintained on daily basis.

Any bullish pullback towards the price zone of 1.2660-1.2700 should be watched for a valid SELL entry. S/L should be set as daily closure above 1.2750.

Projected target for the bearish flag continuation pattern is located around 1.2300. Initial bearish destination is located around 1.2470 and 1.2380.

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Intraday technical levels and trading recommendations for EUR/USD for December 12, 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 a slight bearish bias. 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 the price levels of 1.1420 and 1.1270 until breakout occurs in either direction.

If early bearish breakout below 1.1270 is achieved on lower timeframes, a quick decline should be expected towards 1.1150-1.1100.

On the other hand, bullish fixation above 1.1420 enhances further bullish advancement towards 1.1520 and 1.1610.

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EUR/USD analysis for December 12, 2018

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Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.1350. Anyway, according to the M15 time – frame, I found that EUR/USD is trading above the Ichimoku cloud and that price couldn't sustain below the weekly support 1 (1.1318), which is a sign of the strength. There is also a double top (bullish pattern) on the point and figure chart, which is another sign of the strength. My advice is to watch for buying opportunities. The upward target is set at the price of 1.1370.

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Control zones of EUR/USD pair 12.12.18

A reversal downward pattern was formed yesterday. This makes it possible today to look for sales at competitive prices. It is necessary to take into account that today operations are taking place on the open market, which may be the starting point for the formation of a medium-term model.

For two weeks, there is the formation of the medium-term zone of accumulation. This indicates the significance of weekly extremes. They must be used as support and resistance levels. Yesterday's closing of the American session occurred below the 1/2 control zone of 1.1350-1.1341, which shows a priority change and continuous fall becomes more likely. The purpose of the bear model is the weekly CZ of 1.1258-1.1240 Sales from current rates are possible but gives low profits. The first resistance is a CZ at 1.1356-1.1352. The test of this zone will allow getting favorable prices for sale.

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The determining resistance is the a CZ at 1.1407-1.1398. As long as the pair is trading below this zone, the downward movement will remain a priority. Growth to the current zone will provide the most favorable prices for the sale but today, the zone is outside the daily average.

When maintaining a short position, it is necessary to take into account the fact that the average weekly move will take place on the way to decline. This range is closer to the price than the weekly fault, which may prevent the priority model from being implemented within the current week. Its execution may require a transfer to the following Monday. When the pair reaches the average weekly move, it is possible to fix a part of sales, as demand is expected to grow.

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Daily CZ - daily control zone. The area formed by important data from the futures market that change several times a year.

Weekly fault - weekly control zone. The area formed by marks from important futures market which change several times a year.

Monthly fault - monthly control zone. The area is a reflection of the average volatility over the past year.

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The choice of the dollar fell on the Fed

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The market has once again demonstrated its attitude to the attacks of Donald Trump on the Fed, which is expected to raise rates next week. The dollar was ignored by the comments of the US president, who called the "stupidity" a desire to tighten monetary policy at the last meeting this year.

Investors drew attention to the strong statistics on prices of American producers, which led to an increase in greenback. Jerome Powell knowingly said that the further actions of the department he headed will depend on the incoming data. Therefore, the acceleration of the basic producer price index to 0.3% on a monthly basis and up to 2.7% year-on-year is a strong argument in favor of continuing the normalization cycle next year. A positive report increased the likelihood of a single rate increase over the year from 49% to 57%, and also raised the yield of US government bonds and lowered the EUR / USD rate.

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Meanwhile, the euro is seriously set to support the ECB from maintaining faith in the bright future of the eurozone. If the regulator decides to extend QE or financial officials start talking about the LTRO, then a catastrophe for the euro bulls cannot be avoided.

A noticeable blow to their positions may be dealt with by a weak report on PMI for December or an acceleration of the basic inflation of the USA in November to 2.3% and more. It seems that the time is returning when the most important decisions will depend on the published statistics.

The picture becomes clearer and it becomes clear why investors are neutral about the start of trade negotiations between the United States and China, and besides, they are little interested in the renewed unrest in Catalonia. The authorities are unable to cope with the protesters and ask for help from Madrid. Eurosceptics are not inactive, which is why euro fans are extremely excited. In anticipation of important events, EUR / USD tends to consolidate in the range of 1.1265-1.1445.

It should be noted that the rates for the growth of the dollar exchange rate have been increasing for the third week in a row; their volume has already reached its maximum level in three years. Traders bought the US dollar against the Canadian, euro and yen. The most traded currencies, according to the Commodity Futures Trading Commission, are the yen, the euro, the Australian dollar, the pound and the franc. Bearish traders are tuned for loonie and kiwi.

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EUR / USD: Brexit, Italy, and US statistics

The EUR / USD traders yesterday could not fix the price in the region of the 14th figure. Brexit and Italy put pressure on the pair, therefore, despite the relatively weak position of the US currency, the pair is not able to demonstrate even a minimal correction. Moreover, a set of fundamental factors reduced the price of the pair to the base of the 13th figure, that is, to two-week lows.

First, German Chancellor Angela Merkel announced yesterday that Europe would not reconsider the Brexit deal. And although the position voiced was highly expected, the pound and the single currency fell significantly throughout the market. Obviously, traders hoped for a "miracle", but it did not happen. The Europeans are principled and do not make concessions to London. Merkel only promised to "make every effort" to convince Britain that the backstop will not be of an indefinite nature. Following the meeting with Theresa May, the head of the European Council, Donald Tusk, just threw up his hands. He noted that the EU countries want to help the British prime minister to get approval from the national parliament, but no one in Brussels knows how to do it. A similar opinion was voiced by the European Commission President Jean-Claude Juncker, who expressed his displeasure that Brexit would again be the subject of discussion at the EU summit, which will start tomorrow, December 13th.

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In other words, the probability of a "hard" Brexit is still great, although much depends on the outcome of the above summit. If the EU members meet London and in any way fix the final date of the backstop, the situation will change dramatically, but so far there are, alas, no prerequisites for this.

However, besides Brexit, the single currency has other problems. In particular, the uncertain prospects of the Italian question. For several weeks, information has been circulating on the market that the Italian government is preparing a compromise decision on the budget, in order to avoid a disciplinary procedure on the part of the European Commission. But initial optimism was replaced by cautious expectation, and finally, disappointment.

Negotiations clearly stalled, and not only because of the unwillingness of Rome to significantly reduce the budget deficit, but also because of the contradictions within the coalition government. According to rumors, the representatives of the League of the North and the 5 Star Movement have a different understanding of the negotiations with Brussels, therefore they cannot work out a common position on this issue. Initially, the Italians were ready to reduce the budget deficit to 2.2%, then they allegedly made more significant concessions (1.8%), but this issue was not officially resolved.

Just yesterday, Italian Finance Minister Giovanni Tria, said that his country did not significantly change the parameters of the budget. In addition, rumors appeared in the Italian press about possible early elections, which could take place as early as next March. Given the popularity of Eurosceptics in Italy, in the wake of the next elections, populists and right-wing radicals can only strengthen their positions in parliament, denoting the appropriate vector of foreign policy, primarily in relations with Brussels. By the way, members of the coalition can use the conflict with the EU leadership in their election campaign. In this case, they now have no motivation to compromise and cut down on the planned social programs.

In other words, the problem of the Italian budget is still on the agenda. Today it is known that the government coalition refuses to reduce the budget deficit to a level below 2.1% and this means that the conflict has not been exhausted and will have a corresponding continuation.

Yesterday American statistics also had a certain pressure on the euro-dollar pair, which turned out to be better than expected. Thus, the producer price index fell to 0.1% on a monthly basis, while experts expected a decline to zero. On an annualized basis, the indicator also slowed down (to 2.5%), fully justifying the forecasts of analysts. In my opinion, this release is a dubious reason for optimism. The indicators have slowed down significantly, although not to the expected levels. If today's data on inflation will come out in the "red zone" (with a rather weak forecast), then yesterday's optimism will be completely leveled, and the dollar index will again fall to the area of 96 points.

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Also, do not forget that the dollar is under the background pressure of de-escalation of the US-China trade war. According to preliminary information, Beijing is ready to reduce import duties on American cars. In the coming days, the government will consider a proposal to reduce duties to 15% (from the current 40%). If the authorities approve this proposal, then China will take a serious step towards a broad trade deal, thereby implementing the trump and Xi Jinping Argentinean agreements.

Thus, at the moment, both the euro and the dollar are under certain pressure, however, the single currency feels a stronger pressure of fundamental factors. But if today's release on the growth of American inflation will disappoint traders, then the balance will lean in favor of the euro. Such an ambiguous picture suggests that it is expedient to make trading decisions regarding the EUR / USD pair already during the American session.

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Overview of the foreign exchange market on 12/12/2018

The fall of the pound and the single European currency continued, as no one heard any positive news on Brexit. Theresa May said that she intends to meet with the heads of the countries of the European Union to try to get a better agreement that can satisfy the whims of the British parliamentarians. At the same time, it was announced that the vote on the issue of an agreement with the European Union is scheduled for January 21. That is, Theresa May has almost a month to reach new agreements. However, less than a month, because you should not forget about Christmas and New Year, and many are already not up to talking about Brexit and the like. Everyone wants to relax. The most important thing is that, despite the positive words of the Prime Minister, they did not inspire investors. After all, the European Union has already adopted the current version of the agreement, and now they are invited to throw it in the trash and negotiate again, adding some additional parameters to it. Moreover, no one guarantees that what the English desire is what suits the Europeans themselves. The current version of the agreement suits them completely, because it creates economic preferences for them, due to the absence of any trade points in the agreement. An attempt to clarify this issue, especially those that will allow British companies to work freely on the continent, as if there was no Brexit, most likely, will meet serious resistance. It is obvious that Italy or Spain, which have been experiencing economic difficulties for a long time, are interested in British companies moving aside and giving way to their own manufacturers. Yes, and the Europeans will look very stupid. At first pompously accepted the agreement, and then accept a completely different. British parliamentarians, who are more and more persistently talking about a vote of no-confidence in the government and the prime minister, are adding fuel to the fire. That means Theresa May's resignation. This is not surprising, since the parliamentarians have every reason to believe that Theresa May will negotiate anything but trade. After all, she said in plain text that the issue of the border between Northern Ireland and Ireland needs to be resolved, while in Parliament, it is more concerned about trade conditions.

mECMRUv1BXI592tOrERMy_i4rbdGG3hBk6zjnKGeAt the same time, the single European currency had its own reasons for the decline related to the ongoing protests and demonstrations in France. Although the Government of the Third Republic has already canceled the decision to raise taxes from January 1 of next year, the protests continue, and the heat of the passions is only growing. In particular, there were reports that in Strasbourg, everything turned even to the death of several people. So it is not surprising that Macron was forced to impose a state of emergency. Such events do not add confidence to investors. As they say, money loves silence. It is not surprising that, against this background, the data on producer prices in the United States remained unattended, the growth rates of which slowed down from 2.9% to 2.5%. Even quite good data on the labor market in the UK was of little interest to anyone.

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However, such a significant decline in the euro and the pound can not last forever. The rebound was brewing yesterday, but for a number of reasons listed above, it had to be postponed. Today, data on inflation in the US is being published, which should slow down from 2.5% to 2.2%, and this is against the background of the Fed's recent hints that there is a chance that the refinancing rate will remain at the current level. And although stock market indices have begun to recover, yet another slowdown in inflation indicates growing risks that this process may be protracted. So fears that the Fed will revise its plans are not unfounded.

Of course, in Europe, there will still be published data on industrial production, but very few people will pay attention to them. Yes, and they will not be able to bring optimism, since the industry is expected to slow down from 0.9% to 0.8%. But US inflation is an excellent reason for the correction, so that the single European currency can rise to 1.1375.vBXBvCXrkdhOddtPfJztGntoZ0eXm7Sa_Cl_qDMbAlthough in the UK now is not up to inflation in the United States, investors will still be repelled by it. Yes, and ask for a rebound by itself. It is already knocking on all the doors. So the pound has a good chance to grow to 1.2525.ZLwa3E2WQGnnCzeVeYY_v7wr7re0pnNzCkTZAFKVThe ruble against the background of such enchanting events in the West and in the absence of aggressive rhetoric from overseas feels quite confident. True, it does not demonstrate serious attempts to grow, which indicates the limitations of this possibility. So as long as it remains stable, and as soon as the situation in Europe stabilizes somewhat, it is worth waiting for its easing. In the meantime, the dollar will remain in the area of 66.25 rubles.

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Brexit: To approve an agreement on Brexit, Theresa May only need to solve the issue with the border of Ireland

The euro and the pound fell again in tandem with the US dollar. All attempts at recovery, which could be observed in the morning, were then replaced by large sales.

Information that Theresa May went to a meeting with European leaders to try to convince them of the need to revise their decision on the border in Ireland led only to the sale of risky assets, since traders do not believe in this possibility.

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This week, there will be a summit, where May will once again try to convince the EU representatives that there is no hard border between Northern Ireland and the Republic of Ireland, which can be formed if the UK leaves the EU. But even if May gains the support of EU leaders on this issue, official London will require more firm commitments from the European Union. To do this, the prime minister needs to achieve legally binding guarantees in one form or another, which would really confirm these intentions. If this can be done, there will be a real chance to hold an agreement on Brexit through parliament and take a confident step on the path to resolving this conflict. All this is necessary until March 29, 2019.

Meanwhile, the US dollar continues to strengthen its position. Yesterday's US producer price data in November of this year led to an increase in short positions in the EUR / USD currency pair.

According to a report by the US Department of Labor, the price index for goods and services of companies in November of this year rose 0.1%, after rising 0.6% in October. Despite the slowdown compared with the previous month, the data turned out to be better than forecasts of economists, who even expected the index to decline by 0.1%.

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As for the basic producer price index, which does not take into account the volatile categories of food and energy, prices rose by 0.3% in November compared with the previous month. Economists had forecast an increase in the index excluding food and energy by 0.1%.

Data from The Retail Economist and Goldman Sachs on retail sales slightly affected the US dollar. According to the report, the retail sales index in the US rose by 2.1% from 2 to 8 December over the week. Compared to the same period of 2017, retail sales increased by 2.2%.

According to the Redbook, retail sales in the US for the week from December 2 to 8 rose immediately by 6.6% compared with 2017. For the first week of December, sales fell by 0.5%.

As for the technical picture of the EUR / USD currency pair, it is likely that the pressure on the euro will continue. The breakthrough of intermediate support in the area of 1.1320 will lead to a new wave of short positions with access to the lows of last month in the area of 1.1290 and 1.1265. An upward correction will be limited to the levels of 1.1350 and 1.1370.

In the meantime, the good news that Beijing is seeking to ease trade tensions with Washington continues to delight investors.

Yesterday, a high-ranking representative of China told his US partners that Beijing would reduce duties on American cars from 40% to 15%. I recall that between the parties on December 1, a truce was concluded for 90 days, during which the countries must make a number of concessions, which will be offered and agreed by each of the parties.

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Wave analysis of GBP / USD for December 12th. An unsolved question on Brexit does not give a pound a chance to build an uptrend

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Wave counting analysis:

During the trading session on December 11, the GBP / USD currency pair lost another 75 basis points more. Thus, the expected wave 5, a, continues to build and takes a very complex and non-standard form. A successful attempt to break through the level of 127.2% according to Fibonacci showed the readiness of the instrument to further decline, and the general uncertainty regarding the Brexit question predicts the pound to fall below the target level of 161.8% Fibonacci. Much, as before, depends on the nature of the news background. Yesterday's news from the UK as a whole can be described as neutral. No new data for Brexit.

The objectives for the option with purchases:

1.2935 - 50.0% of Fibonacci

1.2991 - 38.2% of Fibonacci

1.3175 - 0.0% of Fibonacci

The objectives for the option with sales:

1.2398 - 161.8% of Fibonacci

1.2218 - 200.0% of Fibonacci

General conclusions and trading recommendations:

The currency pair GBP / USD continues to build a downward wave 5, a. Considering the news background and the breakthrough of 1.2564, I expect the tool to continue to decline with targets located near the estimated level of 1.2398, which corresponds to 161.8% Fibonacci and recommend small sales of the pair. By the completion of the construction of the wave a, it can lead to a positive news background.

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Fractal analysis of major currency pairs for December 12

Dear colleagues.

For the Euro / Dollar currency pair, we follow the formation of the downward structure of December 10 and the development of which is expected after the breakdown of 1.1310. For the Pound / Dollar currency pair, we have expanded the potential for the downward cycle from December 4 to the level of 1.2305. For the currency pair Dollar / Franc, the price is close to the abolition of the downward structure of December 5, for which a breakdown level of 0.9951 is necessary. For the currency pair Dollar / Yen, we are following the formation of the ascending structure from December 10 and an impulsive movement is expected after the breakdown of 113.72. For the Euro / Yen currency pair, we follow the formation of the upward structure of December 6 and the development of which as a cycle is expected after the breakdown of 129.34. For the Pound / Yen currency pair, we have expanded the potential for the downward cycle from December 5 to the level of 140.12 and we consider the upward movement as a correction.

Forecast for December 12:

Analytical review of H1-scale currency pairs:mkn99R8ZIsUZ3Vix2NQkBuCkfKMTMGvCwhsULTLzFor the Euro / Dollar currency pair, the key levels on the H1 scale are: 1.1383, 1.1359, 1.1342, 1.1310, 1.1279, 1.1253 and 1.1220. Here, we are following the descending structure of December 10th. A downward movement is expected after the breakdown of 1.1310. In this case, the target is 1.1279 and the breakdown of which should be accompanied by a short-term downward movement in the range of 1.1279 - 1.1253. The potential value for the bottom is considered the level of 1.1220, upon reaching which we expect a rollback to the top.

The short-term upward movement is possible in the range of 1.1342 - 1.1359 and the breakdown of the latter value will lead to a deep correction. Here, the target is 1.1383 and this level is the key support for the bottom.

The main trend is the downward structure of December 10.

Trading recommendations:

Buy 1.1342 Take profit: 1.1357

Buy 1.1362 Take profit: 1.1381

Sell: 1.1310 Take profit: 1.1282

Sell: 1.1277 Take profit: 1.1255

07xmXm2S6dreNKigXXaXeOZr3qUFiezxxqgjFeRBFor the Pound / Dollar currency pair, the key levels on the H1 scale are: 1.2664, 1.2623, 1.2562, 1.2528, 1.2475, 1.2417, 1.2384 and 1.2305. Here, we are following the development of the downward cycle of December 4th. The downward movement is expected after the breakdown of 1.2475. In this case, the target is 1.2417 and in the range of 1.2417 - 1.2384 is the price consolidation. The potential value for the bottom is considered the level of 1.2305, upon reaching which we expect a rollback to the top.

The short-term uptrend is possible in the range of 1.2528 - 1.2562 and the breakdown of the last value will lead to a prolonged correction. Here, the goal is 1.2623 and this level is the key support for the top. Its price passage will have to form the initial conditions for the upward cycle. In this case, the goal is 1.2664.

The main trend is the downward structure of December 4.

Trading recommendations:

Buy: 1.2528 Take profit: 1.2560

Buy: 1.2564 Take profit: 1.2620

Sell: 1.2475 Take profit: 1.2420

Sell: 1.2382 Take profit: 1.23106OVuqpFYbDIPPpDs6AmnhPb5hC6-MsruhscIefwoFor the Dollar / Franc currency pair, the key levels on the H1 scale are: 0.9951, 0.9922, 0.9905, 0.9871, 0.9856, 0.9815 and 0.9787. Here, we are following the formation of the downward structure of December 5th. The price passage of the range of 0.9871 - 0.9863 should be accompanied by a pronounced downward movement. Here, the target is 0.9815. The potential value for the bottom is considered to be the level of 0.9787, after reaching which we expect consolidation.

The short-term upward movement is possible in the range of 0.9951 - 0.9922 and the breakdown of the latter value will have an uptrend development. In this case, the potential target is 1.0005, up to this level, we expect clearance of the expressed initial conditions for the upward cycle.

The main trend is the formation of a downward structure of December 5.

Trading recommendations:

Buy: 0.9953 Take profit: 1.0000

Buy: Take profit:

Sell: 0.9855 Take profit: 0.9818

Sell: 0.9813 Take profit: 0.9790SA-zdm6L8GNm0cnJuePCm3JBZ9LrJ-9FcwccHpteFor the Dollar / Yen currency pair, the key levels on the scale are: 114.45, 114.13, 113.72, 113.41, 112.95, 112.76, 112.46, 112.22 and 111.87. Here, we follow the formation of the ascending structure from December 10th. The continuation of the upward movement is expected after the breakdown of 113.41. In this case, the goal is 113.72 and near this level is the price consolidation. The breakdown of 113.72 will lead to the development of a pronounced upward movement. Here, the target is 114.13 and the potential value for the top is 114.45, upon reaching which we expect a consolidated movement, as well as a rollback to the correction.

The short-term downward movement is possible in the range of 112.95 - 112.76 and the breakdown of the last value will lead to a prolonged correction. Here, the goal is 112.46 and this level is the key support for the top. Its breakdown will cancel the rising structure from December 10. In this case, the first goal is 112.22.

The main trend is the formation of the ascending structure of December 10.

Trading recommendations:

Buy: 113.41 Take profit: 113.70

Buy: 113.74 Take profit: 114.10

Sell: 112.95 Take profit: 112.76

Sell: 112.74 Take profit: 112.50

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For the Canadian dollar / dollar currency pair, the key levels on the H1 scale are: 1.3557, 1.3521, 1.3465, 1.3429, 1.3370, 1.3344, 1.3311 and 1.3247. Here, the price forms the local potential for the top of December 7th. The short-term upward movement is possible in the range of 1.3429 - 1.3465 and the breakdown of the latter value should be accompanied by a pronounced upward movement. Here, the target is 1.3521. The potential value for the top is considered the level of 1.3557, upon reaching which we expect consolidation, as well as a rollback to the top.

The short-term downward movement is possible in the range of 1.3370 - 1.3344 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3311 and this level is the key support for the top. Its price passage will have to form a downward structure. In this case, the target is 1.3247.

The main trend is the ascending cycle of December 4, the local structure for the top of December 7.

Trading recommendations:

Buy: 1.3430 Take profit: 1.3465

Buy: 1.3467 Take profit: 1.3520

Sell: 1.3370 Take profit: 1.3345

Sell: 1.3343 Take profit: 1.311368qow7VySp4ITyhVmsCn3Sv0OLPYNsTZ5ty172wbFor the Australian dollar / dollar currency pair, the key levels on the H1 scale are: 0.7290, 0.7257, 0.7237, 0.7196, 0.7166, 0.7127 and 0.7100. Here, we are following the development of the downward structure of December 4th. The short-term downward movement is possible in the range of 0.7196 - 0.7166 and the breakdown of the latter value will lead to a pronounced movement. Here, the target is 0.7127. The potential value for the bottom is considered to be the level of 0.7100, upon reaching which we expect consolidation, as well as a rollback to the top.

The short-term uptrend is possible in the range of 0.7237 - 0.7257 and the breakdown of the latter value will lead to a deep correction. Here, the target is 0.7290 and this level is the key support for the downward structure of December 4.

The main trend is the downward structure of December 4.

Trading recommendations:

Buy: 0.7237 Take profit: 0.7255

Buy: 0.7258 Take profit: 0.7290

Sell: 0.7196 Take profit: 0.7166

Sell: 0.7164 Take profit: 0.7130sadpWdzDnHeq2r2zduiTWJ7GzvaW1x8roFSyUfnHFor the Euro / Yen currency pair, the key levels on the H1 scale are: 130.13, 129.82, 129.34, 128.95, 128.36, 128.09, 127.68 and 127.43. Here, we follow the formation of the ascending structure of December 6. The short-term upward movement is expected in the range of 128.95 - 129.34 and the breakdown of the latter value will lead to the development of a pronounced movement. In this case, the goal is 129.82. The potential value for the top is considered the level of 130.13, upon reaching which we expect consolidation, as well as a rollback to the top.

The short-term downward movement is possible in the range of 128.36 - 128.09, hence a high probability of a reversal upwards. The breakdown of the level of 128.09 will have to form a local structure for the downward movement. In this case, the goal is 127.68 and the range of 127.68 - 127.43.

The main trend is the formation of the ascending structure of December 6.

Trading recommendations:

Buy: 128.95 Take profit: 129.30

Buy: 129.37 Take profit: 129.80

Sell: 128.34 Take profit: 128.12

Sell: 128.05 Take profit: 127.70UlpQXxaKL7ed2M2UPCOXC9SzX9D99TvSK2gPJrngFor the Pound / Yen currency pair, the key levels on the H1 scale are: 143.16, 142.48, 142.11, 141.46, 141.15, 140.59 and 140.12. Here, we are following the downward cycle from December 5th. We expect the downward movement to continue after the price passes the range of 141.46 - 141.15. In this case, the goal is 140.59. The potential value for the bottom is considered the level of 140.12, after reaching which we expect a rollback to the top.

The short-term upward movement is possible in the range of 142.11 - 142.48 and the breakdown of the last value to the prolonged correction. Here, the target is 143.16 and this level is the key support for the downward structure.

The main trend is the local structure for the bottom of December 5th.

Trading recommendations:

Buy: 142.11 Take profit: 142.45

Buy: 142.55 Take profit: 143.14

Sell: 141.15 Take profit: 140.65

Sell: 140.55 Take profit: 140.20

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

Wave analysis of EUR / USD for December 12. The euro is on the verge of a new fall.

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Wave counting analysis:

In the course of trading on Tuesday, the EUR / USD currency pair lost another 40 basis points, but the level of 23.6% held out and did not let the instrument lower. Thus, the estimated wave from the trend correction section may become complicated once again, and its goal remains unchanged, 100.0% of Fibonacci. A successful attempt to break through the level of 23.6% according to Fibonacci will indicate the readiness of the instrument to both reduce and complicate the downward trend section.

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 within the framework of the construction of the ascending wave c, however, it may turn out to be shortened and may even be completed. A successful attempt to break through the mark of 1.1315 will lead to a further decrease in quotations, possibly within the framework of a new downtrend trend with the first goal located around 1.1215, which corresponds to 0.0% Fibonacci. Both purchases and sales now involve additional risks, since the wave pattern does not look completely unambiguous.

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

GBP / USD. 12th of December. The trading system. "Regression Channels". The pound continues to collapse

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: -123.1797

The GBP / USD currency pair, after a minimal correction, resumed a rather strong downward movement. It is difficult now even to suppose that it can save the pound sterling from new falls in the coming days and weeks. The British Parliament received information that the Brexit vote will be held until January 21. The exact date is not called. Thus, even more than a month, the pound sterling, like the whole of Great Britain, will be in limbo. On the pound sterling, it can only be reflected from the negative side. We have repeatedly noted that in the current conditions, the pound requires at least some decision on Brexit, certainty is needed. Theresa May fears that her plan will be rejected by Parliament, and will probably spend the coming weeks negotiating with opposition forces, trying to convince them or reach an agreement with them. Yesterday's macroeconomic reports in the UK supported the pound for just a few hours. Wages in the country in October rose by 3.3%, although forecasts were no more than 3.0%. At the same time, the number of applications for unemployment benefits exceeded the forecast. Today, there are no major events planned in Britain at all, so all attention is paid to the speech of Jerome Powell and the inflation report for November in the USA.

Nearest support levels:

S1 - 1.2451

S2 - 1.2390

S3 - 1.2329

Nearest resistance levels:

R1 - 1.2512

R2 - 1.2573

R3 - 1.2634

Trading recommendations:

The currency pair GBP / USD continues a strong downward movement. Thus, before the Heikin Ashi indicator reverses to the top, which would mean a round of upward correction, sell-positions with targets of 1.2451 and 1.2390 are relevant.

It is recommended that long positions be considered not before the bulls overcome the moving average line, however, as before, this will require serious fundamental reasons.

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.

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

Technical analysis of USD/CHF for December 12, 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.

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

EUR / USD. 12th of December. The trading system. "Regression Channels". Inflation in the United States and Powell's speech

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - down.

The junior linear regression channel: direction - sideways.

Moving average (20; smoothed) - down.

CCI: -125.3314

The currency pair EUR / USD on Wednesday, December 12, continues its downward movement, after fixing below the moving average line. It seems that the rather modest uptrend has ended, and the pair is now waiting for another decline below 1.1200. There is, of course, the hope that the pair will simply remain within the side area, the likeness of which can be seen from November 21. The boundaries of this area are fuzzy, but still, there is a chance that the pair will not be able to overcome the Murray level of "1/8" - 1,1292. From a fundamental point of view, everything remains the same. No positive news on the topic of Brexit, or on the Italian budget. Today in the European Union, a secondary indicator of industrial production in October will be published. But much more interesting information is expected from the States. Today in America, the consumer price index for November will be published and it is expected that it will slow down from 2.5% to 2.2% y / y. This report may temporarily support the Eurocurrency. Also today, there will be a meeting between Wives Claude Juncker and Italian Prime Minister Conte on the budget. A little later, Jerome Powell will give a speech in Congress. Recall that during the last of his speeches, "dovish" notes were traced. Thus, if markets today hear something about a reduction in monetary policy tightening, it can also put pressure on an already overbought US dollar.

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 currency pair EUR / USD continues to move down. Thus, it is recommended today to trade short positions with the goal of 1.1292. The color of 1-2 bars with the Heikin Ashi indicator in purple will signal a turn of the corrective movement.

It is recommended to open long positions if traders manage to overcome the moving average. In this case, the target for the long positions will be the level of 1.1414, and the trend in the instrument will again become ascending.

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