Maybe everything is not so bad (we buy at the breakdown of USD/JPY pair and sell gold)

The ECB's final decision on monetary policy showed that the regulator, led by the new leader, has not yet developed a final decision on the future of monetary policy. In other words, the bank is not ready to start large-scale incentive measures, which led to the strengthening of the single currency, which was supported by the situation of certainty following the election to the British Parliament.

In fact, as we evaluate the result of the ECB meeting, we can say that any pause in the decision to introduce new stimulus measures will provide broad support for the single currency rate. And the news that the Conservative Party in the person of its leader B. Johnson became the winner in the parliamentary elections in Britain will support the single currency, as well as sterling, for a limited period of time. The main reason for this is not a radical improvement in the economies of the eurozone and the UK, but the emergence of certainty of what should be expected in the future, which, incidentally, is not so cloudless yet.

Meanwhile, another positive aspect of the end of this week is the news that D. Trump has signed with the Chinese side the so-called "first phase" of a new trade agreement between the United States and China today. Yesterday's President's surprise statement to investors that the negotiations were positive and that the States were "very close to a big trade agreement with China" improved the mood of the markets.

From a technical point of view, gold, against this background, also fell sharply after a sharp increase, continuing to form a "rising" flag figure to continue the downward trend. It is likely that the demand for protective assets will decline as the details of the signed document are known. Given this, we expect the continuation of decline in gold prices.

In any case, the ending week brought enough good news so that the growth in demand for risky assets would continue not only today, but also next week.

Forecast of the day:

The USD/JPY pair increased sharply amid declining tensions around US-China trade negotiations. In addition, a general positive is the news about the victory in the elections of the Conservative Party in the British Parliament. We believe that the positive trend can continue today, and on this wave, the pair, breaking through the level of 109.70, will grow to the level of 110.60.

The price of gold has the possibility to continue to decline in the wake of certainty around trade negotiations between Washington and Beijing. From a technical point of view, it forms a figure of the continuation of the upward flag trend. Thus, we consider it possible to sell gold after its decline below the level of 1461.20 with local targets at 1452.45 and 1439.00.

analytics5df338fca0b85.png

analytics5df33940b438a.png

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

Indicator analysis: Daily review on December 13, 2019, on EUR / USD currency pair

According to the news, the pair continued to move up on Thursday and tested the upper fractal 1.1181 presented in a blue dashed line, however, it closed at the historical resistance level of 1.1165 presented in a blue dashed line. On Friday, strong calendar news is expected for the dollar at 13:30 Universal time. Also for this day, the market can roll back.

Trend analysis (Fig. 1).

On Friday, the price may continue to move up to test the retracement level of 61.8% which is equivalent to 1.1209 presented in a blue dashed line, and after that, the pair can go down with the first lower target of 1.1176 the retracement level of 14.6% presented in a red dashed line. If successful, the next lower target 1.1156 is a retracement level of 23.6% presented in a red dashed line. Much will depend on the news that comes out at 13:30 Universal time.

analytics5df335c18aabc.png

Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

On Friday, the price may continue to move up.

There is an unlikely scenario where from the level of 1.1201, the price may go down to the lower target 1.1123 the retracement level of 38.2% presented in a red dashed line.

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

Hot forecast for GBP/USD on 12/13/2019 and trading recommendation

The pound quickly moved up as soon as it became known that the Conservatives are not just winning, but also increasing their presence in the House of Commons. At the same time, Boris Johnson can now not only celebrate the victory, but boldly call himself one of the most successful leaders of the Conservative party of recent decades. After all, his party not only improved its result, but received a confident majority. At the time of writing this review, the vote count has not yet ended, but the Conservatives already have 360 seats, while 326 seats are needed for the majority. In other words, no one will be able to prevent Boris Johnson from realizing his Brexit plan, as the Conservatives no longer need to seek the support of other parties since they can pass any laws alone. Indeed, this is a triumph, and in this situation, the growth of the pound is not surprising.

analytics5df3323bc78cf.png

Although emotions overwhelm investors, it seems that the pound has exhausted its growth potential. The UK economy is not in very good condition, and everyone is well aware that Brexit will inevitably have a negative impact on it. Therefore, the euphoria will gradually come to nothing, and investors will have to take into account the real state of things. The only thing that can please is that at least it is clear how events will develop in the future. Apparently, Boris Johnson will still be able to fulfill his promise, and complete the protracted epic with Brexit with at least some clarity. However, it's obvious that you need to wait for the rebound, and the reason for it may be today's data on retail sales in the United States. The growth rate of which should accelerate from 3.1% to 3.4%.

Retail Sales (United States):

analytics5df33258b6f74.png

From a technical point of view, the pound has reached its peak over the past year and a half, and its growth has stopped. The support level is at 1.3300. The movement in this direction will be slow and progressive, and the first level is 1.3450, then 1.3400.

analytics5df33269e7a90.png

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

EUR/USD trading plan for December 13, 2019. The victory of the Conservative party in Britain supported the pound and the

analytics5df32d5b89b4c.jpg

The ECB left monetary policy unchanged and did not support the euro. It came instead from Britain, from the preliminary data that B. Johnson's party is confidently winning the election with about 368 seats out of 650. Winning would allow Johnson to hold his version of Brexit without further postponements on January 31, which consequently made the pound show a huge increase with more than 300 points from 1.3170, its level at the beginning of the day, to more than 1.3500.

The euro's gains are much more modest, nevertheless, the EUR/USD pair has reached for the last 3 months, a high of 1.1180 - a new signal that the market is ready to move the euro up. The EUR rose against the yen.

News also came out of the European events that the US is ready to reduce tariffs against China if the said country makes significant concessions in trade negotiations.

EUR/USD: Keep buying at 1.1035 -with possible rollbacks at 1.1130.

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

GBP/USD. Victory night for Johnson: pound storms year-and-a-half highs

Many traders who have at least three years of experience trading in the currency exchange market will probably remember the election night in 2016, when Britain summed up the results of the historical referendum on the country's withdrawal from the EU. That night, the GBP/USD pair showed tremendous price fluctuations: at first, it increased to the level of 1.50, and in the morning, it declined two thousand points to the base of the 30th figure. This is all because the votes were first counted in those regions of Britain that support the European Union, and closer to dawn, data came from other sections. Thus, when it finally became clear that the Eurosceptics won, the pound began to dive down, freezing at the levels of multi-year lows. In turn, British entrepreneurs suddenly realized that they could lose access to a single market overnight, after which the British currency paired with the dollar updated historical lows (which, subsequently, were repeatedly updated, up to the level of 1.1958).

analytics5df330597f6d1.jpg

Last night, the pound began to gain momentum also "ahead of schedule", that is, before the announcement of the official results. Therefore, I personally experienced a light deja vu, internally preparing for the subsequent dive of GBP/USD. However, apparently, the current situation cannot be compared with the situation in 2016, and even with the situation in 2017, when Theresa May recklessly decided on early elections in order to strengthen her position in parliament. Moreover, the data received by the morning of December 13 suggest that Boris Johnson did what his predecessor did not succeed: he was able to strengthen the position of conservatives in the House of Commons, and most likely will form a parliamentary majority with a large margin of several tens of votes.

At the time of writing these lines in Britain, nearly half of the ballots were counted. According to the data received, conservatives receive 357 seats, Labor - 202, Scottish National Party - 46, Liberal Democrats - 10. Now, if we talk about the expected results in general, so far we can proceed from the results of exit polls, although they all confirm the optimistic forecasts of the YouGov research agency. In particular, Boris Johnson can get 368 seats in the new parliament. So if these exit poll data are confirmed, the conservatives will receive more than 50 mandates more than they had following the results of the early elections the year before last. Moreover, they are guaranteed to form a majority in the House of Commons and will be able to make legislative decisions independently of other political forces. Let me remind you that during the previous parliament, the Tories were forced to enter into a situational alliance with the Democratic Union Party. This fact negatively affected the approval process of the deal with Brussels - both during the time of Theresa May and under Johnson's reign. Not only were the conservatives "dissidents" who did not support the course of the Prime Minister, but the allies also put forward their own conditions, which were often impossible.

Now, Johnson got rid of this "anchor". If the exit polls are confirmed, the prime minister will be able to coordinate government initiatives (including the Brexit deal) without fear of possible internal party opposition, given the gap of several dozen mandates. By the way, according to Johnson himself, prior to the election, all candidates who went to the polls from the Conservative Party signed an assurance that they would support the agreement reached with Brussels. In fact, the deplorable results of the Labor Party (which, apparently, lost about 70 seats in parliament compared to the previous elections) indicate that the British want to put an end to the protracted negotiating epic. It was under Johnson that the Conservative Party rating went up sharply: residents of Foggy Albion are sure that he will be able to finish what he started, finally putting an end to the three-year negotiation process.

analytics5df33030e8db2.jpg

However, the "point" is still far away. By January 31, the UK will leave the European Union formally (judging by the preliminary results of the elections, this can already be said with confidence). Nevertheless, the country will finally leave the Alliance only at the end of the transition period. This period ends at the end of 2020. And although the parties can extend it, Johnson is determined in his usual manner: he plans to streamline trade relations between London and Brussels over the remaining (since January) 11 months in order to leave the EU not formally, but de facto. According to some experts, difficulties will arise again in relations between Britain and the Alliance at this stage, and this fact will put pressure on the pound.

However, these are problems not of today or even of the current year. At the moment, the bulls of GBP/USD are celebrating a well-deserved victory - after all, just a few days before the vote, YouGov experts did not exclude the option of a "suspended" parliament. Now, this scenario is practically excluded, so the pound is held at one and a half year price highs. Meanwhile, the nearest resistance level is located at around 1.3580 - this is the upper line of the Bollinger Bands indicator on the monthly chart.

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

Trump's tweets are the driving force of the market. Positive growth supports CAD, while JPY is on sale

President Trump's tweets are currently the main driving force of the markets. The announcement of reaching an agreement on the first phase of a trade deal with China led to bond sales, which is another record levels of US stock indices and a general decrease in tension.

A little later, the Bloomberg agency confirmed Trump's message. According to them, Trump signed an agreement on the first stage, and according to which, the American side reduces the existing duties on imports of goods from China by half and refrains from introducing new duties on December 15, and China, in turn, gives guarantees purchases of agricultural products from the United States in significantly higher volumes.

On the other hand, economic indicators faded into the background against the backdrop of a positive reaction to reports on the progress of the negotiations. However, they cannot be ignored. The reports are alarming - despite the stabilization of consumer inflation at comfortable levels for the Fed, production prices are slowly but surely continuing to decline. In November, price growth was zero, and year-on-year, the growth slowed down from 1.6% to 1.3%.

analytics5df32276876aa.jpg

The slowdown in producer prices is another signal that despite all efforts, the US economy continues to lose growth in a number of ways. Labor productivity decreased in 3 quarters, labor costs slowed, which would inevitably lead to a slowdown in consumer demand, and ISM in the manufacturing sector confidently consolidated below 50p.

All these factors indicate that the positive effect of a possible conclusion of a trade agreement will not last long. Therefore, the markets will need to present something more substantial, such as an increase in world trade or consumer demand.

USD/CAD

Yesterday, BoC CEO Stephen Poloz held an annual press conference at the Imperial Club of Canada, which was expected with great interest, but Poloz, in fact, did not introduce any new benchmarks to the markets.

In addition, Poloz expressed concern about the high level of uncertainty, which is the result of low rates, rising debt and technological changes, and expects negative consequences for both households and companies and governments. Poloz also associated the slowdown in labor productivity with a weakening population growth, calling it structural factors, and made no predictions about the Bank of Canada rate.

In the coming weeks, tax cuts are expected for middle-income citizens, which may increase household incomes and slightly support inflation, and updated budget information will be provided in the coming days. This news will support the loonie, but not significantly. Thus, the main reaction will remain on commodity prices in Canada, global trade prospects and demand in the United States.

Technically, expectations for USD/CAD remain bearish. The recent low of 1.3160 has been tested. Meanwhile, the current key support is 1.3135 / 45 (61.8% of the growth in October and November). With the breakdown of support, it will open the way to 1.3145 / 50.

USD/JPY

The volume of industrial production in Japan declined in October by 4.4%. The annual decline - the maximum in more than 6 years and amounts to 7.7%. The activity index for large Tankan enterprises in the fourth quarter, published this morning, came out mixed - the growth of the index from 6.6% to 6.8% was due solely to activity in the services sector, manufacturing companies showed a slowdown, and the general state of the business is noticeably lower than a year ago.

analytics5df3229529ba4.jpg

The yen was ready for a bearish breakdown from the range of 108.30 / 109.70, but a surge of enthusiasm caused by the increased probability of a US-China trade deal raised USD/JPY at the upper boundary of the range. Now, a breakthrough is possible, but it will be based only on the sale of the yen as a protective asset. At the same time, the upward momentum, which started in August, shows clear signs of fatigue. Thus, if the resistance 109.70 stands, and we will find out about this in the near future, the probability of a downward turn will increase, and the target will form at levels 106.50 / 107. Alternatively, if there are reports of the official signing of the first phase of the trade deal, then growth may continue to the resistance zone 110.50 / 70.

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

Trading plan for EURUSD for December 13, 2019

analytics5df32153e22a4.jpg

Technical outlook:

EURUSD broke above 1.1180 interim resistance which means that bulls are in control. The pair is likely to print new highs to 1.1500. Keeping the above medium term picture in mind, we would bring in the short term probabilities which are pointing towards a potential correction lower. First, it is recommended to take more profits on the long positions initiated earlier and buy again on dips. The expected correction from these levels could be shallow and find support around 1.1100 levels at least before the rally resumes. On the flip side, if the entire corrective structure that began from 1.1180 earlier is not yet complete, we can witness a sharp drop towards 1.0980 levels again before a major bottom is in place. A break below 1.1105 levels could be seen as the first sign of a continued drop and break below 1.1040 further increases our confidence towards the same. Please avoid initiating aggressive short positions since the overall trend remains bullish and buying on dips is recommended.

Trading plan:

Keep buying on dips, stop at 1.0879, target is 1.1500

Good luck!

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

Technical analysis: Important intraday Level For EUR/USD, December 13,2019

analytics5df2ea2590571.jpg

Today, German WPI m/m from the euro area is due. The US will release such economic data as Business Inventories m/m, Import Prices m/m, Retail Sales m/m, and CoreRetail Sales m/m. So, amid the reports, EUR/USD will move in a low to medium volatility during this day.TODAY'S TECHNICAL LEVEL:Breakout BUY Level: 1.1225. Strong Resistance: 1.1219. Original Resistance: 1.1208. Inner Sell Area: 1.1197.Target Inner Area: 1.1171. Inner Buy Area: 1.1145. Original Support: 1.1134. Strong Support: 1.1123. Breakout SELL Level: 1.1117. (Disclaimer)

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

Technical analysis: Important Intraday Levels for USD/JPY, December 13, 2019

analytics5df2e9b776193.jpg

In Asia, Japan will release the Revised Industrial Production m/m, Tankan Non-Manufacturing Index, and Tankan Manufacturing Index. The US will also publish some economic reports such as Business Inventories m/m, Import Prices m/m, Retail Sales m/m, and Core Retail Sales m/m. So there is a probability the USD/JPY pair will move with low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Resistance. 3: 110.11. Resistance. 2: 109.88. Resistance. 1: 109.65. Support. 1: 109.41. Support. 2: 109.20. Support. 3: 108.98. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD: plan for the European session on December 13. Conservative Party wins the UK elections and can get a majority in

To open long positions on GBP/USD you need:

Brexit in one step. According to exit polls, the Conservative Party wins the elections in the UK and can get a majority in Parliament, which will allow the prime minister to realize his scenario for the country's withdrawal from the EU. Apparently, the growth of the pound will continue further. You can count on reaching the 40th figure in the medium term. The main driving force in GBP/USD will now be statements made after the election, as well as the results of the formation of the majority of the Conservative Party. With a downward correction of the purchase, you can look at 1.3437 and 1.3375, and it is best to immediately buy the pound for a rebound after testing the area of 1.3316. A break of the level of 1.3523 will lead to a new wave of growth for the pair with reaching highs 1.3604 and 1.3648 with the resistance test of 1.3698, where I recommend taking profit.

To open short positions on GBP/USD you need:

We don't have to talk about selling the pound now and it's better not to do it. In case the Conservative Party fails to form a majority in Parliament, this will lead to a sharp downward correction of GBP/USD to the area of lows 1.3375, 1.3316 and 1.3265, where large buyers will again enter the market. Under the scenario of further growth and development of the situation in favor of Boris Johnson, serious attempts to limit the upward trend will be visible only after updating the highs of 1.3563 and 1.3648. However, it is best to refrain from opening short positions in GBP/USD.

Signals of indicators:

Moving averages

Trade is conducted above 30 and 50 moving averages, which indicates further growth in the pound.

Bollinger bands

In case the pound falls, support will be provided by the average boundary of the indicator at around 1.3218.

analytics5df3134a96069.png

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD: plan for the European session on December 13. The ECB's monetary policy course will remain unchanged

To open long positions on EURUSD you need:

Yesterday's statements by ECB President Christine Lagarde on the topic of monetary policy, which will remain unchanged at the beginning of next year, exerted only temporary pressure on the European currency. All emphasis was shifted to parliamentary elections in the UK, which ultimately led to a sharp increase in EUR/USD. At the moment, bulls need to break above the resistance of 1.1198, which will only increase demand for the euro and lead to renewal of highs in the areas of 1.1226 and 1.1263, where I recommend taking profits. Given the absence of important statistics in the first half of the day, we cannot exclude the possibility of a downward correction to the support area of 1.1153, the formation of a false breakout will be a signal to open long positions in order to continue growth. Otherwise, it is best to buy EUR/USD for a rebound from a low of 1.1111.

To open short positions on EURUSD you need:

Bears will wait for an unsuccessful consolidation above the resistance of 1.1198, which will be the first signal to open short positions. A more important task will be the return and the breakout of support at 1.1153, which will lead to a downward correction of the euro to a low of 1.1111, where I recommend taking profits. However, one can count on such a movement only after the release of good data on US retail sales. With a EUR/USD growth scenario above the resistance of 1.1198 in the morning, it is best to return to short positions only after updating the high of 1.1226, or sell immediately for a rebound from a larger resistance of 1.1263.

Signals of indicators:

Moving averages

Trade is conducted above 30 and 50 moving averages, which saves a chance to continue the upward trend in the euro.

Bollinger bands

A breakthrough of the upper boundary of the indicator, which coincides with the resistance of 1.1198, will lead to a new growth wave. The downward correction will be restrained by the lower boundary of the indicator in the area of 1.1090.

analytics5df311b8ca2ee.png

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
The material has been provided by InstaForex Company - www.instaforex.com

Forecast for EUR/USD on December 13, 2019

EUR/USD

Yesterday's meeting of the ECB came out as boring as expected, GDP forecasts came out even a little weaker: 1.1% for the current year versus 1.2% earlier and 1.4% for next year. The subsequent speech by Christine Lagarde was also neutral, she identified the economy as standing still after the previous weakening. But this was enough for investors to be optimistic (the absence of negativity is already positive), especially amid the British pound's uncontrollable growth. The euro traded in the range of 50 points and has grown by another 60 points in the Asian session today.

Also yesterday, US President Trump published a tweet about the proximity to a trade deal with China. There were rumors that tariff increases for Chinese goods scheduled for December 15 would not be introduced. If the deal does take place, then in the future it can be taken as the victory of the United States in a trade war, respectively, the demand for dollars will increase.

analytics5df30a11ed7b7.png

In the current situation, the euro has an open target of 1.1215 - a Fibonacci level of 100.0% (November 12, 2018 low). Overcoming the level opens the second target of 1.1250 (August 6, 2019 peak). We doubt higher growth.Nevertheless, you should wait until Monday, the 16th, when the issue of the deal is resolved.

analytics5df30a27b2268.png

The price is completely in an upward trend on the H4, we are waiting for an increase to 1.1215.

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

Forecast for GBP/USD on December 13, 2019

GBP/USD

The preliminary official results of the British parliamentary elections became known this morning: the Conservatives won a resounding victory, gaining a parliamentary majority of 368 seats, and the Laborites had only 191 seats. In third place is the Scottish National Party with 55 parliamentary seats, and the Brexit Party has not received a single seat. The pound soared by 346 points in the Asian session. Of course, this is one of the many paradoxes of the market - the growth of the currency is threatened by the country's exit from the EU with a bad deal, and in the coming weeks.

analytics5df308ce0c8e7.png

To date, the price has overcome the Fibonacci level of 238.2% on the daily chart. We allow growth to continue to the Fibonacci level of 271.0% at the price of 1.3648 (near the September 2017 high). But the price may not reach the designated goal, retreating under pragmatic ideas.

analytics5df308e326a16.png

The growth looks so rapid on the four-hour chart that we do not receive any additional information.

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

Forecast for USD/JPY on December 13, 2019

USD/JPY

The dollar jumped 75 points yesterday against the yen due to Donald Trump's Twitter post about getting "very close to a big deal with China." It is assumed that the amount of duty-paid Chinese goods will be reduced to 360 billion dollars, respectively, new tariffs scheduled for December 15th will not be introduced. Despite the growth of the stock market (S&P 500) by 0.86% and the current rise of the China A50 by 1.18% and the Japanese Nikkei 225 by 2.17%, it is still difficult to make a decision based on the same messages from Trump on the social network, because before he wrote about a "big deal", which is about to be, but did not advance, and was even called into question by the Chinese side itself. We believe that you should not rush to conclusions and wait for a new week.

analytics5df30630ef5cc.png

From a technical point of view, the situation with the USD/JPY pair is increasing completely - the signal resistance range of 109.30/50 has been overcome on the daily timeframe, the Marlin oscillator is in the growth zone, the target is open at 110.00 on the trend line of the green price channel. Overcoming the level will open the important goal of 110.46 - this is the upper limit of the red price channel, originating in August 2015, exit from which opens up the prospect of growth by another three figures.

analytics5df3064670e3b.png

The price is briskly growing above the balance and MACD lines on the four-hour chart, Marlin in the growth zone. It is likely that growth will still slow down, as the development of yesterday's news has already taken place.

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

Fractal analysis for major currency pairs on December 13

Forecast for December 13:

Analytical review of currency pairs on the scale of H1:

analytics5df2f95761efa.png

For the euro / dollar pair, the key levels on the H1 scale are: 1.1261, 1.1239, 1.1198, 1.1155, 1.1134 and 1.1103. Here, we are following the development of the upward cycle of November 29. The continuation of the movement to the top is expected after the breakdown of the level of 1.1198. In this case, the target is 1.1239. Price consolidation is near this level. For the potential value for the top, we consider the level of 1.1261. Upon reaching this value, we expect a rollback to the correction.

Short-term downward movement is expected in the range 1.1155 - 1.1134. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 1.1103. This level is a key support for the upward structure.

The main trend is the upward structure of November 29

Trading recommendations:

Buy: 1.1198 Take profit: 1.1239

Buy: 1.1241 Take profit: 1.1261

Sell: 1.1155 Take profit: 1.1135

Sell: 1.1132 Take profit: 1.1103

analytics5df2f9719b4f6.png

For the pound / dollar pair, the key levels on the H1 scale are: 1.3732, 1.3598, 1.3534, 1.3417, 1.3360 and 1.3268. Here, the subsequent targets for the top were determined from the medium-term ascendant structure on November 27. Short-term movement to the top is expected in the range 1.3534 - 1.3598. Hence, there is a high probability of a reversal in the corrective movement. The breakdown of the level of 1.3600 will lead to a movement to a potential target - 1.3732. We consider the movement to this level as unstable.

Short-term downward movement is possibly in the range of 1.3417 - 1.3360. The breakdown of the last value will lead to a long correction. Here, the target is 1.3268. This level is a key support for the upward trend.

The main trend is the upward cycle of November 27

Trading recommendations:

Buy: 1.3535 Take profit: 1.3596

Buy: 1.3600 Take profit: 1.3680

Sell: 1.3417 Take profit: 1.3360

Sell: 1.3358 Take profit: 1.3280

analytics5df2f9da337d2.png

For the dollar / franc pair, the key levels on the H1 scale are: 0.9915, 0.9884, 0.9864, 0.9820, 0.9789 and 0.9745. Here, we are following the development of the downward structure of November 29. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.9820. In this case, the target is 0.9789. Price consolidation is near this level. The breakdown of the level of 0.9789 should be accompanied by a pronounced downward movement. In this case, the potential target is 0.9745. We expect a rollback to correction from this level.

Short-term upward movement is possibly in the range of 0.9864 - 0.9884. The breakdown of the latter value will lead to in-depth movement. Here, the target is 0.9915. This level is a key support for the downward structure of November 29.

The main trend is the downward structure of November 29

Trading recommendations:

Buy : 0.9864 Take profit: 0.9883

Buy : 0.9885 Take profit: 0.9913

Sell: 0.9820 Take profit: 0.9791

Sell: 0.9787 Take profit: 0.9745

analytics5df2f9f51073c.png

For the dollar / yen pair, the key levels on the scale are : 110.52, 110.20, 109.96, 109.62, 109.23, 109.08 and 108.85. Here, the price canceled the development of the downtrend and at the moment, has issued the expressed initial conditions for the top of December 12. The continuation of the movement to the top is expected after the breakdown of the level of 109.62. In this case, the target is 109.96. We expect a short-term upward movement, as well as consolidation in the range of 109.96 - 110.20. For potential value for the top, we consider the level of 110.52. Upon reaching which, we expect a rollback to the correction.

Short-term downward movement is expected in the range 109.23 - 109.08. The breakdown of the last value will lead to an in-depth correction. Here, the target is 108.85. This level is the key support for the upward structure from December 12.

Main trend: initial conditions for the top of December 12

Trading recommendations:

Buy: 109.63 Take profit: 109.96

Buy : 109.98 Take profit: 110.20

Sell: 109.23 Take profit: 109.08

Sell: 109.06 Take profit: 108.85

analytics5df2fac7b8ff6.png

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3256, 1.3217, 1.3196, 1.3146, 1.3118 and 1.3094. Here, we continue to monitor the long-term descending structure of December 3. The continuation of movement to the bottom is expected after the breakdown of the level of 1.3146. Here, the target is 1.3118. Price consolidation is near this level. For the potential value for the bottom, we consider the level of 1.3094. Upon reaching which, we expect a consolidated movement.

Short-term upward movement is possibly in the range of 1.3196 - 1.3217. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3256. We expect the expressed initial conditions to formulate for the upward cycle up to this level.

The main trend is the long-term descending structure of December 3

Trading recommendations:

Buy: 1.3196 Take profit: 1.3215

Buy : 1.3218 Take profit: 1.3252

Sell: 1.3145 Take profit: 1.3119

Sell: 1.3116 Take profit: 1.3095

analytics5df2fae332817.png

For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.7032, 0.7012, 0.6980, 0.6957, 0.6909, 0.6894 and 0.6866. Here, we continue to monitor the development of the ascending structure from December 10. At the moment, we expect movement to the level of 0.6957. Short-term upward movement is possibly in the range 0.6957 - 0.6980. The breakdown of the last value should be accompanied by a pronounced upward movement. Here, the target is 0.7012. For the potential value for the top, we consider the level of 0.7032. Upon reaching this value, we expect a pullback to the bottom.

Short-term downward movement is expected in the range of 0.6909 - 0.6894. The breakdown of the last value will lead to an in-depth correction. Here, the target is 0.6866. This level is a key support for the upward structure.

The main trend is the local structure for the top of December 10

Trading recommendations:

Buy: 0.6958 Take profit: 0.6980

Buy: 0.6983 Take profit: 0.7012

Sell : 0.6909 Take profit : 0.6895

Sell: 0.6892 Take profit: 0.6870

analytics5df2f4522e839.png

For the euro / yen pair, the key levels on the H1 scale are: 123.39, 122.87, 122.59, 122.20, 121.96 and 121.63. Here, we are following the development of the ascending structure of December 9. Short-term upward movement is expected in the range of 122.59 - 122.87. Hence, there is a high probability of going into the corrective movement. The breakdown of the level of 122.87 will allow us to count on movement to the limit value - 123.39. We expect consolidation and a pullback to the bottom near this level.

Short-term downward movement is possibly in the range of 122.20 - 121.96. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 121.63.

The main trend is the upward structure of December 9

Trading recommendations:

Buy: 122.60 Take profit: 122.80

Buy: 122.90 Take profit: 123.20

Sell: 122.20 Take profit: 121.98

Sell: 121.94 Take profit: 121.66

analytics5df2fb2c6c7c8.png

For the pound / yen pair, the key levels on the H1 scale are : 149.76, 148.43, 147.70, 146.86, 146.13 and 145.21. Here, we are following the ascending structure of December 4. Short-term movement to the top is expected in the range of 147.70 - 148.43. The breakdown of the last value will lead to a pronounced movement. Here, the potential target is 149.76. From this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 146.86 - 146.13. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 145.21. This level is a key support for the top.

The main trend is the local ascending structure of December 4

Trading recommendations:

Buy: 147.70 Take profit: 148.30

Buy: 148.50 Take profit: 149.50

Sell: 146.80 Take profit: 146.15

Sell: 146.10 Take profit: 145.35

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

GPB/USD: Boris Johnson must try very hard, otherwise the pound may be under $1.20

analytics5df2ed10445c3.jpg

The United Kingdom is hosting the third national parliamentary election in the last four years. The new alignment of forces in the House of Commons should determine the vector of the country's development for the next five years and decide the fate of Brexit.

While Euroscepticist Boris Johnson is focusing on promises to withdraw Great Britain from the EU by January 31, 2020 without new delays or delays, his opponents show completely different views on the country's successful future.

In particular, the head of the Labour Party, Jeremy Corbyn, is promoting the idea of a second referendum on Brexit, which he plans to hold in the first six months after coming to power.

The Labour leader has already announced the nationalization of railways and British companies involved in energy and water supply in the event that he takes the prime minister's chair.

Liberal Democrats, led by Joe Swinson, intend to completely abandon the "divorce" from the EU.

For Prime Minister Johnson to be able to advance his plans for Brexit, which had to be postponed again in the fall, the Tories need to get an absolute majority in the House of Commons, that is, at least 326 out of 650 seats.

Despite the fact that opinion polls predict victory for Conservatives, even a small shift in the mood of voters can change the whole balance of power.

According to the Best for Britain organization, the votes of only 40 thousand people in 36 constituencies will be able to deprive the majority of the Tories.

analytics5df2ed2355877.jpg

According to experts, the election results will be crucial for the dynamics of the pound. In case of a negative scenario, the sterling could fall to $ .20, while it might grow to $1.35 in the opposite situation.

"The results of all recent polls confirm that the Conservative Party, led by Johnson, will be able to form an effective majority in Parliament, which will allow the prime minister to successfully implement the Brexit bill, and the pound to rise to the $1.33 area," Westpac said.

"The main issue is the scale of the pound rally in case of a consensus election result. With this outcome, the GBP/USD pair may reach 1.3500," Saxo Bank analysts said.

"It will not be easy for the pound to rise well above current levels in the near future if the Conservatives do not get a large majority in the House of Commons," the MUFG believes.

"There is still a lot of good news in the pound, as the most likely scenario is getting the majority of the Tories. Meanwhile, the Tory advantage of 20-30 or less places will not be so favorable for the British currency. This alignment of forces will make the new government more dependent on support from "hard" brexitors in negotiations on a free trade agreement with the EU," said MUFG strategist Fritz Lowe.

"The biggest surprise will be the coalition led by the Labour Party, which will not only hurt the pound, but also hit the UK government bonds," said Andrew Wischart of Capital Economics.

He predicts that in this case, the pound will plummet (possibly to $1.20).

According to estimates by Jordan Rochester, a Nomura specialist, the pound could fall 3% on news of a minority government led by Labour.

"The hung Parliament promises Britain a continuation of political chaos, and even the reduction of most of the Tories is fraught with bleak prospects. If Conservatives do not show good results, the pound could significantly weaken in the wake of disappointment. The news of an unstable majority of Tories in Parliament will send the GBP/USD pair to test the area of 1.2985–1.3015. A deeper correction is also possible - in the direction of 1.2880 and further to 1.2820," TD Securities experts noted.

Very soon we will find out whether the Tories will be able to win the majority of the votes. Otherwise, Prime Minister Johnson may lose his seat on Downing Street, and the party that wins will be given the right to form a government and determine what the UK's relationship with the EU will be.

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

EUR/USD: Fed decided to hold their horses. Will the ECB change the rules of the game?

analytics5df2ea57c0d82.jpg

The EUR/USD pair soared to the highest levels since the beginning of November in the region of 1.1140 due to the results of the final US central bank meeting this year, which left the interest rate unchanged and announced plans not to raise it all year in 2020.

After three consecutive interest rate cuts, the regulator seems to have decided to stop.

Noting the strength of the US labor market, a steady increase in consumption and moderate economic growth in the country, the Federal Reserve made a unanimous decision for the first time since May and kept the cost of borrowing at 1.50% –1.75%.

At the same time, the Fed's plans for the next year have significantly changed. If in September nine of the seventeen FOMC members were in favor of raising the rate, now there are only four. The vast majority (thirteen people) vote for the rate to remain unchanged throughout 2020.

The central bank intends to return to toughening the policy in 2021: the majority - nine people - speak out for two or three rate hikes. At the same time, supporters of both a sharp tightening (one vote) and continuing soft politics (four people stand for an unchanged rate) remain in the minority.

analytics5df2ea6c02b12.jpg

"Before raising the rate, I would first like to see a substantial and steady increase in inflation. This is my personal opinion," said Fed Chairman Jerome Powell.

Given the stubborn reluctance of the personal consumption spending index to move to the Fed target of 2% and the regulator's fear that lowering inflation expectations will hinder actual inflation, we can conclude that the threshold for monetary tightening is much higher than for expansion, which is a bearish factor for the greenback.

The USD index updated its monthly low of around 97 points at the December FOMC meeting.

"The Fed has signaled that it has done its job and can leave: the adjustment within the cycle has taken place, and it is enough to keep inflation and economic growth within the framework of forecasts (1.9% and 2%, respectively)," said James Knightley, economist at ING.

The derivatives market continues to expect more from the US central bank and lays in the quotes for another federal funds rate cut by 0.25% in September 2020.

"The Fed remains hostage to the head of the White House, Donald Trump and his trade negotiations with China. If the deal breaks down and the United States introduces a new, most painful round of duties that will hit $155 billion in Chinese goods, both the markets and the economy will suffer, and the Fed will have to rush to help again, filling the fires with cheap money, " Knightley said.

"If Trump has problems before the election, he will not hesitate to make Powell a scapegoat, blaming him for all the problems of the economy. And although Trump's attacks alone are unlikely to turn the Fed off its track, a general deterioration in market sentiment is quite capable of doing this," he added.

In any case, the Fed has spoken, now it is the turn of the European Central Bank.

analytics5df2eaa8b8a75.jpg

Most experts do not expect a new change in the central bank's world outlook in the field of monetary policy from ECB President Christine Lagarde.

Meanwhile, JP Morgan experts do not rule out a reduction in the deposit rate by 25 basis points and QE expansion from €20 billion to €40 billion per month in the foreseeable future.

BofA Merrill Lynch experts, in turn, believe that the derivatives market may begin to build expectations for a deposit rate increase to zero after the first Lagarde press conference. Currently, the quotes contain the probability of a rate cut in March 2020.

If Lagarde turns out to be a smaller dove than her predecessor Mario Draghi, then we can count on the continuation of the EUR/USD rally. However, the ECB has never welcomed the strengthening of the euro, so hints of a willingness to act if necessary are unlikely to disappear from the regulator's rhetoric somewhere.

Today, along with the ECB meeting, parliamentary elections will be held in the United Kingdom. The direction of the pound will depend on the behavior of EUR/USD. The sharp rise in the pound in the event of a confident victory for the Conservatives may lend a helping hand to the bulls of EUR/USD, allowing them to push the pair above 1.1200. At the same time, a "hung" parliament could provoke the pound's collapse, which will pull down the euro to the bottom.

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

Dollar = winner?

analytics5df2e353e0d5a.jpg

The US currency is constantly under the pressure of economic factors. This week, the US Federal Reserve meeting became an indicator of its condition. According to experts, it determined the further dynamics of the dollar.

The result of the US central bank meeting was the preservation of the interest rate in the range of 1.50% –1.75%. Next year, the Fed intends to stop on the issue of rates. As for tightening monetary policy, these measures are possible no earlier than 2021. According to analysts, the current decision of the regulator led to a short-term decline in the greenback against world currencies.

After the Fed meeting, the European currency has significantly risen in price. According to experts, since the beginning of this week the euro has been pleased with the markets with its positive dynamics. The single currency was supported by the publication of positive macroeconomic data on Wednesday, December 11. Recall, the index of economic expectations of investors ZEW in Germany soared to 10.7 points from the previous -2.1 points, although experts expected a zero indicator.

Despite the prevalence of major sentiment, the market is far from positive. It is in suspense due to upcoming events, which include the ECB meeting and elections in the UK. Market participants were a bit confused by the recent speech by Fed Chairman Jerome Powell. He called the series of interest rate cuts recorded in 2019 a mid-cycle correction. Experts believe that this is a signal for the next rise in rates. According to analysts, after the stabilization of the situation, the Fed may begin to raise rates to target values. Many leading agencies gave negative forecasts in case of further escalation of the trade war in Washington and Beijing. Even if this conflict is resolved, next year US GDP growth will still slow down to 2.1%, experts emphasize. In a similar situation, the dollar will be under pressure, analysts said.

A slight fall in the pound's rate supported the greenback on Wednesday, December 11. The British currency is currently growing actively, while the greenback's position is a bit shaken. The EUR/USD pair showed an upward movement yesterday, reaching the level of 1.1093. Subsequently, the trend intensified.

analytics5df2e36839460.png

The EUR/USD pair started on a positive note on Thursday, December 12, cruising in a high range of 1.1137–1.1138. The pair tried to gain a foothold at these levels, and managed to succeed for a long time.

analytics5df2e3caea1e1.png

Subsequently, the EUR/USD pair slipped to 1.1128. The pair found it difficult to stay on the conquered peaks, and slightly retreated.

analytics5df2e3e29e386.png

Experts are certain that the upcoming ECB meeting will not pull down the EUR/USD pair and will not disappoint the market. They are counting on maintaining a balance between the greenback and the euro.

According to analysts, the long-standing struggle for primacy among the world's leading currencies has tempered the dollar. Experts believe that the greenback has developed the ability to withstand negative influences precisely in this fight. The US currency has gained stability and strength, which is demonstrated to this day, confirming its right to leadership.

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

Development of trading ideas for USD/CAD and oil

Good evening traders! Congratulations to those who used our USD / CAD trading idea and oil last time.

Trading idea for USD / CAD:

analytics5df2d3f2a39ea.png

Development of trading idea for USD / CAD:

analytics5df1fabe5f502.png

Trading idea for oil:

analytics5df2d4072f517.png

Development of trading idea for oil:

analytics5df2d49451b5f.png

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

GBP/USD. December 12. Results of the day. Fate of the election will decide the "doubting" regions of the UK

4-hour timeframe

analytics5df2d73d347cf.png

Amplitude of the last 5 days (high-low): 65p - 66p - 50p - 82p - 108p.

Average volatility over the past 5 days: 75p (average).

The GBP/USD currency pair began a new round of correction movement less than 12 hours before the results of voting in the UK become known. There were no important macroeconomic publications today either in the UK or in the United States, and, in principle, it doesn't matter, since the pound has not responded to any macroeconomic statistics for the last two months, completely focusing on the parliamentary elections, which they consider crucial. The correction of the pound/dollar pair is connected with the banal desire of traders to be certain before the appearance of decisive data. As we wrote a day earlier, with a 80% probability, the party of Boris Johnson will win the election with the necessary advantage, which will create a "majority government". However, there remains a 20% probability that the Conservatives will not be able to get the necessary advantage, then the Parliament will again be in limbo, like Brexit. In theory, such a scenario has a 20% probability. In practice, the likelihood of a Conservative defeat is much greater. The fact is that in at least 100 out of 650 districts, the difference in the political ratings of Corbyn and Johnson is literally a couple of percent. That is, the regions that unequivocally support the leader of the Labour Party or the leader of the Conservative Party are known in advance. It is on the data from these regions that the majority of forecasts of the outcome of the vote are built. But as we have already mentioned, about a hundred regions are hesitating, which means that potentially as many as 100 deputy mandates can be on either side or the other. That is why we are not sure of the victory of Johnson.

Moreover, let's focus on the "homespun truth". Johnson needs a majority of votes in Parliament. His party was ruling even before the current election, but this did not make it possible to realize Brexit, since there were not enough votes all the time. Even at the expense of the allies. Given the fact that the Conservative Party's own forces amounted to about 290 deputies (after all the dismissals and expulsions from the party), then Johnson could not even collect 37 additional votes to accept the Brexit deal. Thus, Johnson needs an unconditional victory in this election, any other result will not solve the problems for which the re-election was started by the prime minister. Also, do not forget that of the allies, the Conservative Party only has the Brexit Party, which will receive an extremely small number of votes in Parliament due to its low popularity in the UK. Nigel Faraj and his party members propose a "hard" Brexit script that is not welcomed by almost all UK residents. Thus, even a coalition with the Brexit party will not bring Johnson a large number of additional votes. So, you need to win on your own. The Labour camp is a completely different matter. Both Liberal Democrats and Scots can support the initiatives of Jeremy Corbyn (the main of which is to prevent Brexit in the form of Johnson's deal). Accordingly, there aren't many Laborites and need a victory in the elections. If Johnson's party fails and does not form a majority government, then everything is practically guaranteed to come to a second referendum, since there is simply no way out of this situation. And almost all opposition parties can help block Johnson's agreement once again.

Thus, in this situation, it is best to wait for the morning voting results and then build any trading plans for the coming days. The upcoming weekend is an opportunity to move away from any outcome of the vote and calm down. Starting next Monday, the pound/dollar currency pair can be traded in the usual way.

Trading recommendations:

GBP/USD has started a downward correction, which may develop into a full-fledged downward trend. Especially if the Conservative Party does not win the parliamentary elections. Thus, it is now recommended to wait until the situation becomes clear and only after that will you resume trade, depending on the election results and the technical picture at that time.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicator window.

Support / Resistance Classic Levels:

Red and gray dotted lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movement options:

Red and green arrows.

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

EUR/USD. December 12. Results of the day. Eurozone economic reports disappointed. ECB left rates unchanged

4-hour timeframe

analytics5df2d1e0bd0e6.png

Amplitude of the last 5 days (high-low): 31p - 70p - 25p - 35p - 75p.

Average volatility over the past 5 days: 48p (average).

The EUR/USD currency pair began a downward movement on Thursday, December 12, which, from our point of view, suggested itself yesterday. To begin with, we still consider the Federal Reserve meeting absolutely neutral. All of Jerome Powell's statements were completely mundane. Even his words about the possible redemption of short-term assets, "if necessary," should not be regarded as hints of concrete actions in the near future. A small decrease in GDP forecasts for 2019-2022 could also not cause a fall in the US currency. Moreover, we would like to immediately note that the main fall of the US dollar has already happened at night, that is, during the Asian trading session. US traders and investors, and European, thus did not work out the Fed meeting and its results by selling the dollar. And if we recall the publication of the November inflation report in the United States, which grew to 2.1% YOY, and the fact that the Fed does not plan any new easing of monetary policy in the coming months or even years, it becomes clear that fundamentally, there was much more reason to strengthen the US dollar than for it to fall. However, the drop did not happen, which again forces us to pay attention to the paradoxical situation in which there are certain reasons for the euro/dollar pair to decline, but they are not sufficient for the bears to resume sales near two-year lows.

The fundamental background for the euro/dollar pair has not changed at all today. We remind you that we continue to regard the economic news and reports from the European Union as weak, and the US data as strong. Thus, the fundamental background for the EUR/USD pair remains unambiguously on the side of the US currency. Today, inflation was first published in Germany in November, which remained at the level of the previous month and amounted to + 1.1% YOY. On the one hand, such a CPI value may seem quite good, but we recall that the German economy is the locomotive for the EU, so inflation in other EU countries is even weaker, and the pan-European one, according to recent data, does not exceed 1.0% YOY . A little later, a report was published on industrial production in the European Union for October, where it was absolutely expected that a drop of 2.2% YOY and 0.5% MOM was recorded, which almost perfectly coincides with the forecast values. And what is the result of today? The next two quite important reports from the EU were disappointing, and the euro currency in began a downward correction.

The results of the ECB meeting, which traders already expected, took place. Both key interest rates, deposit and credit, remained unchanged, -0.5% and 0.0% respectively. In principle, none of the market participants expected the easing of monetary policy even more at the first meeting of the ECB under the leadership of Christine Lagarde. At a press conference, the head of the ECB said that the risks of a slowdown in the EU economy are becoming less pronounced. In addition, Lagarde again called on the governments of the EU member states to provide more stimulus to their own economies. Such rhetoric by Christine Lagarde also completely falls under the definition of "neutral." Based on this, the euro did not receive any reason to strengthen on the penultimate trading day of the week. You can also pay attention to the ECB forecasts for GDP and inflation for the next few years. According to the regulator, GDP in 2019 will grow by 1.2%, and in the next - by 1.1%. Inflation should accelerate to 1.6% YOY only by 2022. From our point of view, it is precisely such forecasts of the main indicators that are the most important today. They mean, in fact, that the ECB is not expecting dramatic improvements in the economic situation in the coming months. That is, the quantitative incentive program will continue to operate for 20 billion euros per month, and rates will remain "ultra-low" for a long time. Moreover, we would like to draw attention to the fact that acceleration of the EU economic growth rate is not expected, but their slowdown is quite possible. The reasons for the negative scenario may be the escalation of trade conflicts in the world, as well as inciting new ones. As a result, a slowdown in the global economy and a similar decline in the economy of each individual country. Based on this, we still believe that it will be extremely difficult for the euro to form an upward trend in the long term.

From a technical point of view, a downward correction against an upward trend has begun for the EUR/USD pair. The upward trend itself remains extremely weak, but the euro is still creeping up, often ignoring macroeconomic reports, which should supposedly support the dollar. Volatility has grown to 48 points in recent days, but this is still not a high enough indicator. Given all the factors, we are still waiting for the resumption of the downward trend.

Trading recommendations:

EUR/USD began a new round of correction. Thus, long positions formally remain relevant with the goal of a second resistance level of 1.1173, but after the completion of the current correction. But overcoming the critical Kijun-sen line may just provoke the resumption of the downward trend with the first goals of 1.1080 and Senkou Span B.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicator window.

Support / Resistance Classic Levels:

Red and gray dotted lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movement options:

Red and green arrows.

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

EURUSD. Lagarde press conference and unexpected news from the Chinese front

Today was the final ECB meeting for this year - and at the same time the first one that is chaired by Christine Lagarde. Contrary to the fears of some analysts, she did not bring down the European currency with her dovish intentions. Lagarde was clearly trying to maintain a certain balance in her rhetoric (following the manner of Mario Draghi), and she almost succeeded. The EUR/USD pair did not slump, but did not jump - by and large, following the results of the December meeting, the pair remained in the same positions as before the meeting of the ECB members. The pair retreated to the bottom of the 11th figure after the fact - for other reasons, which we will discuss below.

analytics5df2cd98a4f6a.jpg

Returning to the direct results of the ECB meeting, it should be noted that they turned out to be quite neutral - neither the bulls nor the EUR/USD bears were able to become beneficiaries of this event. Lagarde noted both the pros and cons of the current situation, while making it clear that the European regulator is ready to implement one of two scenarios: either the central bank softens its monetary policy in 2020 or maintains a wait-and-see attitude. The option of raising the rate is not considered now, however, as is the option of expanding incentives. In general, such rhetoric was taken into account in quotes, so it did not make much impression on traders. But the updated economic forecasts included positive surprises for the euro, due to which the EUR/USD pair slightly grew after Lagarde's press conference ended.

Speaking in the language of numbers, the situation is as follows. The ECB has revised its forecast for economic growth in the eurozone for the current year upward (up to 1.2% from the previous value of 1.1%), but at the same time downward revised its forecast for the next year (up to 1.1% from the previous mark 1 , 2%). For the first time, forecasted GDP indicators for 2022 were published - according to ECB members, the economy will grow to 1.4% (a similar value for 2021). As for inflation, the situation here is mirror-like: if the forecast for this year was maintained at the previous level, then the regulator announced more optimistic estimates for the next year (1.1% instead of 1.0%). The inflation forecast in 2021 was revised to 1.4% (the previous estimate was 1.5%), and for 2022 it remained at 1.6%.

As you can see, the published forecasts do not allow bears or bulls to declare their dominance. Nevertheless, traders focused on the growth of the inflation forecast for the next year - this fact supported the euro. The subsequent rhetoric of Lagarde complemented the optimistic picture, after which the pair again touched the middle of the 11th figure. First, she stated that bearish risks for inflation have become "less significant", although they still prevail. Secondly, Lagarde positively evaluated the latest macroeconomic releases (apparently, we are talking about the CPI and ZEW) - in her opinion, now we can say that there are "the first signs of a slowdown in the economy." Thirdly, the head of the ECB again appealed (albeit very indirectly) to the leaders of the countries "with budgetary opportunities" with an appeal to take "decisive action". Although Lagarde did not specify her requirements today, the hint was more than transparent. The fact is that over the past two months she has repeatedly called on Germany and the Netherlands, with their "chronic budget surpluses", to increase investment and government spending. Today she once again conveyed a concealed greeting to these countries.

In contrast to optimistic estimates, Christine Lagarde again recalled that the risks for the eurozone economy remain downward, so "if necessary", the central bank is ready to use the available levers of influence on monetary policy. However, this phrase even under Mario Draghi has become familiar and to some extent a "duty".

Thus, despite the caution of the head of the ECB, the euro received some support from the European regulator. Following the results of the December meeting, the EUR/USD pair not only maintained its position, but also received an occasion for short-term price jumps of an impulsive nature to the region of the middle of the 11th figure.

Why did the situation change dramatically during the US session on Thursday? The pair sharply turned and headed towards the 10th figure, and already after the fact of the ECB meeting. According to most currency strategists, Trump played a role here, who, using Twitter, again forced traders to turn their attention to themselves. He published a very short but capacious post, in which he stated that "China is close to a deal." At the same time, the US president added that the American side also wants to sign a trade agreement. On the one hand, the market is used to similar tweets - for the most part they are emotional, so to speak, "without practical continuation". But along with Trump's message, encouraging information came from the Wall Street Journal. Journalists of this influential publication reported that the White House finally offered Beijing the long-awaited compromise solution: the United States reduces duties on Chinese imports by 50% (worth $360 billion) and refuse to introduce duties, which should take effect on December 15 (worth $160 billion dollars).

analytics5df2cdac3483d.jpg

The dollar jumped across the market amid such news, reflecting increased demand. The EUR/USD pair was no exception: with a high degree of probability it will return to the framework of the 10th figure today. If the above rumors are indeed confirmed, then the downward trend may continue, at least to the first support level of 1.1030 (the lower boundary of the Kumo cloud on the daily chart). Having broken this level, the bears will open their way to the lower line of the Bollinger Bands indicator on the same timeframe, which corresponds to the level of 1.0970.

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

EURUSD: There are enough problems in the eurozone, indicated by data on industrial production and German inflation. ECB will

Two reports came out in the morning that weighed on the European currency. First of all, the weakness of industrial production, which has been observed throughout the year, continued to pull down the economy into recession. It is impossible not to mention German inflation, which declined in November this year, which creates a number of problems for the European Central Bank to stimulate growth.

analytics5df2c8d9be8cd.png

Most likely, the measures that were introduced in the early fall of this year, and we are talking about lowering the deposit rate and returning to the bond redemption program, are clearly not enough to renew inflationary pressures. The final meeting of the European Central Bank for this year will take place today, at which, apparently, rates will also remain unchanged at zero. It is unlikely that by the end of the year the European regulator will make any significant changes in the course. However, it is expected that the ECB will be forced to continue lowering rates in the first quarter of 2020 if the measures that were taken in the early fall of this year do not bring a gentle result. So far, no special economic recovery has been observed.

As I noted above, the problems of the industrial sector did not end, and judging by the report, they only worsened. Recent data from the Purchasing Managers Index for the manufacturing sector, which is a leading indicator, only confirmed a further decline in production at the end of this year.

analytics5df2c8ed7371f.png

According to a report by the statistics agency Eurostat, industrial production in the eurozone decreased by 0.5% in October of this year compared with September, and immediately fell by 2.2% compared to October last year. The data were slightly worse than economists' forecasts. According to revised data, production also declined in September, but only by 0.1%, completely erasing the expectations of traders for restoration in the future. Production in the eurozone also declined in the second and third quarters of this year, and, most likely, the reduction will be observed in the fourth quarter.

analytics5df2c93c20f2f.png

German inflation data did not put much pressure on the euro, as it was completely predicted by economists. According to the report, the final CPI of Germany in November this year decreased by 0.8% compared with October and grew by only 1.1% compared to the same period in 2018, which clearly does not reach the level of about 2.0% established by the European Central Bank. The data completely coincided with the forecasts of economists. As for Germany's consumer price index, harmonized by EU standards, it also decreased by 0.8% in November this year compared with October and grew by only 1.2% compared to last year, which fully coincided with the forecasts of economists.

As for the technical picture of the EURUSD pair, the growth can continue only on condition of positive statements from the new president Christine Lagarde. A break of resistance at 1.1160 will provide risky assets with an upward movement to the highs of 1.1200 and 1260. If the pressure on the euro returns, intermediate support will be in the area of 1.1120, but larger levels are concentrated at the lower boundaries of the channel in the areas of 1.1070 and 1.1030.

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