02_12 Trader Morning Coffee

Good morning all,

While on Friday Crude Oil were being sold off dragging down also Nat Gas, we haven't seen any comparable risk-off movement in stocks. So, US indices closed the day in the red, but with small movements if compared to energy commodities.

The week is opening on the front foot with Asian indices rising and futures on EU ones all up 0.20 - 0.30 % at the moment.

Markets had ro revise trading sentiment over the weekend by a surprisingly strong industrial production in November in China. On the other hand, exports from South Korea, a worldwide electronic power force have declined for the 12th month in a row. Manufacturing PMIs in the EU and US should be watched closely today.

Forex major currency pairs are still continuously sleepy, with the FT underlining last one has been the least volatile week since the euro introduction 20 years ago. If you cannot play it through options, one should consider the opportunity of being involved in a 'pro style' CARRY TRADE with the intention of receiving interest from the bought currency: USD offers a good interest rates differential in this sense against vast majority of G10. Hedging against the forward rate would be smart, but will erase a big part of the gains (that however will need big amount investments for being interesting). Here the front Forward Curve for EurUsd in bps.

EURUSD TN FWD

0.6310

EURUSD SN FWD

0.6200

EURUSD SW FWD

4.5500

EURUSD 2W FWD

9.2900

EURUSD 3W FWD

15.3900

EURUSD 1M FWD

28.6100

EURUSD 2M FWD

48.5100

EURUSD 3M FWD

68.3400

ECONOMIC DATA

  • IT, GE, FR, EU Markit PMI Manifacturing
  • ECB Lagarde speech 14.00 Gmt
  • US ISM Manifacturing 15.00 Gmt
  • US ISM Prices paid 15.00 Gmt
  • CFTC Gold, Oil Net Positions 20.30 Gmt

DURING the WE

  • Black Friday online sales in the US hit a record level, yet again underscoring a shift among consumers
  • China's central bank says it intends to retain a prudent policy apporachas it predicts a prolonged downturn in the global economy
  • German Chancellor Angela Merkel's government was thrown into doubt after her coalition partners, the Social Democrats, elected new leaders over the weekend who have threatened to pull out of the ruling pact.
  • The focus of the UK election campaign has taken a swing towards the law and order following the attack at London Bridge on Friday, and the Conservatives are planning a major review of both defense and foreign policy if they win.

That's all for today

Stay Safe

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

The hopes of a new agreement between the United States and China on trade are outweighed by all the negativity (we expect

On the last day of the past week, the US dollar weakened sharply against a basket of major currencies amid a negative reaction from the Chinese authorities, not Trump's decision to sign the bill regarding the situation in Hong Kong and is in fact an interference in China's internal affairs. In the financial markets, this caused a wave of fears that rising tensions between countries could freeze the trade negotiations process and cause another serious blow to the global economy.

In the wake of these events, the US dollar came under pressure from a basket of major currencies, while gold increase sharply, exceeding the previous local maximum of November 26. However, today on Monday, the situation is changing during the Asian trading. Gold is under pressure, the ICE dollar index is receiving support, and the benchmark yield of 10-year US Treasuries is growing at the moment of about 2.00%.

Such market dynamics can be explained by the lack of continuation of pickings, at least on the weekend, between Beijing and Washington. Thus, it can also be assumed that this is still due to the fact that D. Trump may simply limit himself to the "democracy" bill in Hong Kong, and no more, since for the American businessman president, it is not vague mantras about democracy in China that are closer, but alignment trade balance between countries and strengthening the economy of America.

Assessing this, we believe that the subsidence of the Hong Kong issue, in relations between Washington and Beijing, will lead again to increased demand for risky assets and weakening investor interest in defensive assets.

Today, Caixin China Manufacturing Sector Data was released. The indicator rose in November to 51.8 points against the October value of 51.7 points and a forecast of decline to 51.4 points. At the same time, these data, in our opinion, are also the reason for today's optimism in the markets in the morning.

Today, the values of the index of business activity in the manufacturing sector (PMI) from the Institute of Supply Management (ISM) will also be announced. It is expected to increase to 49.2 points from 48.3 points. If the data does not disappoint, they will stimulate growth in demand for US stocks, and will also support the dollar.

In addition to the publication of these important economic statistics, the attention of investors will be drawn to a speech by ECB President C. Lagarde today. Any of her words expressing the meaning of the need for further pursuing a soft monetary policy will lead to a weakening of the euro.

Forecast of the day:

EUR/USD is consolidating in the range of 1.0990-1.1025. We expect that the pair will resume decline to 1.0950 if the statistics from the USA turn out to be strong and Lagarde does not begin to reassure the markets with a change in the ECB monetary rate

The price of gold continues to consolidate in the range of 1451.70-1465.00. The growth in demand for risky assets, in the wake of strong data on the economies of China and the United States, may lead to a decrease in the price to the lower boundary of this range, and to its fall to 1445.30 in the future.

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Hot forecast for GBP/USD on 12/02/2019 and trading recommendation

The tragedy that happened on a Friday night in central London, as awful as it may sound, plays into the hands of Boris Johnson and the entire conservative party in Great Britain. Thus, the Tories are now only busy with the fact that they hang all the dogs on the Labour, since, according to them, it was the mitigation of punishment for an already convicted criminals, which the party led by Jeremy Corbyn at one time pushed through and became the cause of the incident. Argumentation is of course like that, however, just a week and a half before the early parliamentary elections, this will obviously weaken the position of the Labor Party, since Her Majesty's subjects now need ordinary and understandable explanations. This means that the probability of a conservative victory, led by Boris Johnson, is significantly increasing, and this is a positive signal for business, as it reduces the risk of uncertainty around Brexit. Moreover, since investors have clarity as to what and how will happen after the election, they feel much more confident. This is reflected in the sudden growth of the pound. Therefore, I repeat, no matter how terrible it may sound, the tragedy that happened supported the pound.

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Nevertheless, the growth was due solely to emotions, and today, investors are invited to look at some facts. In particular, we are talking about the index of business activity in the manufacturing sector of the UK, which should fall from 49.6 to 48.3. At the same time, similar data on the United States will be published a little later, which should coincide with the preliminary estimate, which showed an increase in the index of business activity in the manufacturing sector from 51.3 to 52.2. That is, in the bottom line, we have a decline in the optimism of industrialists in the United Kingdom, against the backdrop of its growth in America. As a result, the pound will inevitably be under pressure.

Manufacturing PMI (UK):

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In terms of technical analysis, we see that the GBP/USD pair locally accelerated after it reached a mirror level of 1.2885. The price jump brought us back to the resistance area of 1.2940, with which the last move began. On the other hand, the subsequent movement was in terms of narrow consolidation of 1.2930 / 1.2940, where the end of the trading day was in the form of a downward surge, and the opening of a new week in the form of a gap.

Considering the trading chart in general terms, we see that the quote is concentrated in the upper half of the six-week flat 1.2770 / 1.3000, where there were no cardinal changes, as well as the acceleration of volatility.

It is likely to assume that the relatively narrow fluctuation that is currently taking shape in the market will not last very long, where the gap can close at the beginning, but then there will be an increase from it, which is in the downward direction. Thus, a downward position is being considered to a greater extent, but after consolidating the price below the morning consolidation of 1.2909 / 1.2915.

Concretizing all of the above into trading signals:

- Long positions are considered in case of price fixing at higher than 1.2940.

- Short positions are considered in case of price fixing at lower than 1.2905.

From the point of view of a comprehensive indicator analysis, we see that indicators, relative to all the main time intervals, retain an upward interest.

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Indicator analysis: Daily review on December 2, 2019, on the GBP / USD currency pair

Trend analysis (Fig. 1).

On Monday, the price, moving up, will test the resistance line of 1.2977 presented in a red bold line. After reaching this level, it will work down with the target of 1.2879, the lower fractal.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - down;

- Candlestick analysis - up;

- Trend analysis - down;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

On Monday, the price may continue to move up.

The price, moving up, will test the resistance line of 1.2977 presented in a red bold line. After reaching this level, it will work down with the target of 1.2879, the lower fractal.

An unlikely scenario is to immediately go down with the target at 1.2879, the lower fractal.

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GBP/USD: plan for the European session on December 2. The pound remains in the side channel and awaits new opinion polls

To open long positions on GBP/USD you need:

Buyers of the pound coped with the task last Friday and did not let the pair fall below the support of 1.2880. At the moment, due to the gap down, the bulls need to return the resistance of 1.2925, which will be the first signal to open long positions in the hopes of updating highs in the areas of 1.2966 and 1.3017, where I recommend profit taking. In case of a weak report on the UK manufacturing sector, in the first half of the day it will be possible to observe the pound's further fall to the support area of 1.2883, however it is best to open long positions from there after a false breakout is formed. I recommend buying GBP/USD immediately for a rebound only after a test of a low of 1.2845.

To open short positions on GBP/USD you need:

Following the overlap of the morning gap, pound sellers will try to regain market position, and a weak report on the decline in the UK manufacturing sector will lead to a false breakout in the resistance area of 1.2925, which will be the first signal to open short positions. The main goal of the bears will be to retest the level of 1.2883 and consolidate below this range, which will quickly push GBP/USD to the support area of 1.2845, where I recommend profit taking. In case the pair grows above the resistance of 1.2925 in the morning, it is best to return to short positions only for a rebound from a high of 1.2966. The main market movement will be formed only after the publication of regular opinion polls on the topic of general elections in the UK.

Signals of indicators:

Moving averages

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

Bollinger bands

If the pound rises, sellers will try to restrain the pair from going above the upper boundary of the indicator at 1.2945, while the lower boundary at 1.2884 will provide support.

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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
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EUR/USD: plan for the European session on December 2. Pressure on the euro could return after eurozone manufacturing sector

To open long positions on EURUSD you need:

The bears made an attempt to break through the support of 1.0990 last Friday, but this did not lead to anything, which made it possible for buyers to regain the level of 1.1010, above which trading is now ongoing. Only the formation of a false breakout in the region of this support range will be a signal to buy the European currency, however, further upward movement will directly depend on reports on the production activity of the eurozone countries. In case of weak data, which is likely to come out, a breakthrough of 1.1010 will lead to a retest of support at 1.0990, from where you can open long positions immediately for a rebound. Another important task for euro buyers is to break through the upper boundary of the side channel of 1.1035, since only going beyond it will lead to a more powerful upward momentum in EUR/USD with updating highs of 1.1059 and 1.1088, where I recommend profit taking.

To open short positions on EURUSD you need:

An unsuccessful attempt to break support at 1.0990 caused sellers to leave the market at the end of last week. Today, a very important task will be the return of EUR/USD under the middle of the side channel of 1.1010, which will inspire confidence in the bears and will lead to re-updating the lower boundary of 1.0990, where I recommend profit taking. Such a movement may occur after the release of weak reports on manufacturing activity in the eurozone. If the data is not as bad as expected, a more important task for EUR/USD sellers will be to protect the resistance at 1.1034, which is also the upper limit of the side channel. Only the formation of a false breakout at this level will be a signal to sell the euro. Otherwise, it is best to open short positions immediately on the rebound from a high of 1.1059.

Signals of indicators:

Moving averages

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

Bollinger bands

Growth will be limited by the upper level of the indicator in the area of 1.1034, while the lower boundary in the area of 1.0990 will provide support.

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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. Preview of the week. Lagarde in the European Parliament, the "vendetta" of China and Nonfarm

Bears of the euro-dollar pair again tested the ninth figure on Friday in spite of fairly strong data on the growth of European inflation. The last trading day of the week and month was indicated by abnormal price movements: the strong downward impulse faded before it started. In the last hours of the trading week, many market participants took profits without risking leaving open positions for the weekend. Therefore, EUR/USD traders closed November within the 10th figure. The pair began trading on the first day of December at the same positions. The fundamental background for the dollar is still controversial - the dollar is keenly reacting to news from the front of US-Chinese negotiations, and the euro is torn between good macroeconomic reports and the dovish intentions of ECB members.

Not many important macroeconomic statistics are expected for the EUR/USD pair during this trading week (with the exception of the ISM and Nonfarm manufacturing index). The main focus of the market will be focused on the dynamics of the development of US-Chinese trade relations and on the comments of Federal Reserve and ECB officials. Geopolitics will also play a role in determining the growth or decline of anti-risk sentiment in the foreign exchange market.

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First of all, we are talking about the situation in Hong Kong, where the confrontation between anti-Chinese protesters and the city administration continues. Yesterday, police dispersed several thousand anti-government protesters, ending a brief lull after local elections. Last week, Trump signed bills in support of protesters, and this fact provoked a negative reaction from Beijing. Chinese officials promised Washington to retaliate, but so far these threats have not been translated into reality. Traders had the hope that the political conflict would not affect the negotiation process between the United States and China - all the same, the effects of the trade war are felt both by the United States and China. This intrigue may be resolved this week, especially in light of the approaching December 15, when next duties should come into force over Chinese imports.

If we talk about the planned speeches of the "top officials" of the central bank, which are important for EUR/USD traders, then we should highlight today's speech by the head of the European Central Bank Christine Lagarde. At 12:00 (London time), she will announce a report to members of the Committee of the European Parliament on economic and monetary issues. Since the topic of the report is directly related to monetary policy, the market will show particular interest in it. Let me remind you that in her recent speeches, she called on EU countries to bet on investments, thereby stimulating economic growth in the eurozone. Given the existing split in the ECB camp (in September, some regulator members opposed the resumption of QE), this Lagarde rhetoric was indicative: judging by everything, it will continue to exert verbal pressure on the EU countries - primarily Germany and the Netherlands - urging them to use surplus of their budgets.

She can also comment on data published on Friday on the growth of European inflation. Contrary to negative forecasts, the consumer price index rose in November, reaching 1.0% from the previous value of 0.8% (growth forecast was at 0.7%). Core inflation also showed a positive trend, rising from 1.1% to 1.3%. This is the best result in the last six months. In this context, Lagarde's personal position regarding this inflationary dynamics, as well as her comments on the moods among the members of the European Central Bank, are also of interest. The euro will receive some support if the essence of the rhetoric is reduced to a wait-and-see attitude.

ECB board member Benoit Coeure is set to speak (December 3) this week, who unexpectedly joined the dissidents at the September meeting, speaking out against the resumption of the stimulus program. Fed official Randall Quarles, who takes the post of vice chairman of oversight in the Federal Reserve, will speak on December 4.

As for macroeconomic reports, it is worth noting the ISM manufacturing index will also be published today during the US session. Previous releases of this indicator put pressure on the dollar: the index has been below the 50th mark since August, marking the worsening situation in this area. According to preliminary forecasts, a slight recovery of the indicator is expected today (from 48.3 to 49.2 points). This will put quite strong pressure on the US currency if the index declines, especially in light of the uncertain prospects for the US-Chinese dialogue.

Over the course of two days (December 2 and 4), we will also find out the importance of European PMI indices in the manufacturing and services sectors. But we are talking about final estimates, which, as a rule, coincide with the initial data. Therefore, these releases are unlikely to affect the dynamics of the EUR/USD pair.

The most important day of this week is Friday, when Nonfarm will be published. The greenback will receive significant support if the real data corresponds to preliminary forecasts. Thus, the unemployment rate should remain at the previous level - 3.6% - against the background of a fairly strong increase in the number of employees (+190 thousand). But a separate line is worth noting here, the growth rate of the average hourly wage. Analysts expect the indicator to recover - in annual terms, it should grow to a three percent mark, and in monthly terms - to 0.3% (after falling to zero). If salary data is in the green zone, it will be difficult for the EUR/USD bulls to keep their positions occupied by that moment.

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In general, the euro-dollar pair continues to trade within the range of 1.0970-1.1090: last week the bears could not push the lower boundary of this band, while the bulls could not even squeeze to the middle of the 10th figure. This week, the struggle between sellers and buyers will erupt with renewed vigor, even despite the relatively empty economic calendar.

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

Indicator analysis: Daily review on December 2, 2019, on the EUR / USD currency pair

Trend analysis (Fig. 1).

On Monday, the first lower goal is to achieve a pullback level of 61.8%, equivalent to 1.0993 presented in a red dashed line. If successful, the next lower target is 1.0982, the lower fractal presented in a blue dashed line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - neutral;

- Trend analysis - down;

- Bollinger Lines - down;

- Weekly schedule - down.

General conclusion:

On Monday, a downward movement is possible.

The first lower target is the retracement level of 61.8% which is equivalent to 1.0993 presented in a red dashed line. If successful, the next lower target is 1.0982, the lower fractal in blue dashed line.

An unlikely but possible scenario is an upward movement with a target of 1.1040 which is a pullback level of 50% in a blue dashed line.

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

Control zones NZDUSD 12/2/2019

If the close of trading today occurs above the weekly WCZ 0.6450-0.6438, then the upward movement will become a priority. The November high will be the next determining point in the formation of the upward impulse. Work in continuation of growth will require the formation of a corrective movement.

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A return to the upper boundary of the flat will be an important event, since closing of trades below the high of the previous week will indicate the formation of a false breakout pattern.

An alternative model will be developed if the pair can not gain a foothold above the weekly control zone. This should lead to strong supply growth and the absorption of today's Asian growth. In this case, sales will come to the fore, and the first goal of the fall will be the low of the previous week.

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

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Control zones for GBP/USD on 12/02/19

Today's opening of trading occurred with a price gap relative to the closing of Friday. This makes it possible to say that the gap is closed in 90% of cases. Now, growth to the maximum of the last month should be considered as an opportunity to search for a pattern for sale. The first target will be a minimum of November.

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Working within the framework of the flat indicates the need to use extremes to enter a position and fix profits.

The option to exit the flat will be developed if the closure of one of the next American sessions occurs above the November maximum. This will provide an opportunity to search for favorable prices for the purchase in the medium term. The defining resistance is the Weekly Control Zone 1/2 1.2979-1.2960.

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

Weekly CZ - weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. The zone that reflects the average volatility over the past year.

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

Markets are waiting for PMI data for the Eurozone and the USA. Low volatility keeps CAD and JPY in a narrow range

Thanksgiving Day celebrations in the United States and the lack of economic data have contributed to a decrease in volatility. On Monday morning, trading was mixed, demand for risk revived a bit after China published a PMI report in manufacturing and services which turned out to be better than expected. Today, a similar index will be published in the eurozone while ISM Manufacturing will be released in the evening. The publication of which can bring markets out of a dormant state. Now, if the US data is also positive, we can expect an increase in demand for risk and generally increase in volatility.

USD/CAD

The Canadian dollar continues to trade in the range, having no idea how to exit from it. The GDP in the 3rd quarter recorded a growth 0.3%, which is noticeably lower than 1.0% a quarter earlier, but the recession threat is still far away. Investment in business, in turn, grew by 2.6%, which is the fastest growth in 2 years. At the same time, the growth of household spending also accelerated.

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The loonie increased after the announcement of the termination of the strike on the railway was temporary, technically, the Canadian looks neutral. The rapid growth of USD/CAD, which began on October 29, increases the risk of correction, but there are not enough reasons to start it. Meanwhile, China sees Trump's signing of the Hong Kong Riots Act as an interference in internal affairs, which increases the chances that the signing of the first phase of the trade agreement this year may not take place, and this may lead to the end of the rally in the stock markets and an increase in the demand for protective assets.

Thus, the chances of leaving below supports 1.3275 and 1.3258 are small. What is a little more likely is an attempt to test the resistance at 1.3313 / 27 for strength, but in any case, we need new strong introductory indicators to count on pronounced movement.

USD/JPY

Despite the slowdown in world trade and the difficulties with the growth of manufacturing sectors in most countries, Japan has seen steady growth in domestic demand. Exports declined in October again, which was also due to the strong yen.

From October 1, VAT was increased from 8 to 10%. The last time this happened, the Japanese economy moved straight into recession, so certain measures were taken to reduce threats to private demand. The steady state of the labor market, despite stagnating average wage growth, maintains high incomes and also has an increasing effect on demand.

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However, the underlying fears for the government are still strong. Weak global demand, low inflation, fears of an economic downturn after the Olympics and the risks for private domestic demand due to higher VAT create the preconditions for a record budget deficit in fiscal 2020.

On the other hand, the Bank of Japan is still in standby mode. External demand persists, while the yen has not yet reached threatening levels. A strong yen will help reduce inflation. At a meeting in October, the Bank of Japan promised to keep the rate at the current or lower level, and Kuroda assured that the bank would be ready to take mitigation measures at the next meeting, if necessary. The markets are not particularly impressed - the yen continues to strengthen.

Nevertheless, attempts are being made to limit the growth of the yen. In October, the Bank of Japan stopped buying all government bonds with a maturing for more than three years, and will most likely attempt to straighten the yield curve.

In any case, the yen is currently stable, and there is no reason for a sharp decline. Resistance 109.73 will stand if the threat of a renewed tariff war between China and the United States becomes more pronounced. In the meantime, the markets are relatively calm, the move to the next peak at 110.45 / 55 looks more likely.

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

Friday mover: Crude Oil

Good morning,

let's have a fast look at Friday's big mover, Crude Oil.

We had talked about it in the 'The Trader Morning Coffee' column posted on Friday, citing that 2 big investment houses lowered their target to 50$ / barrell and the Oman oil minister suggested an agreement over the expansion in production to be reached at the next Opec meeting.

Either amid the news or the technicla factor that oil was close to resistance levels and to the higher border of a rising channel, on Friday afternoon it dropped almost 5% close to the 55 level, dragging down also NatGas.

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You can see in the chart that price has moved down to the lower border of the channel and it is now rebounding 1.25%.

The levels to whatch to the upisde now are the 56.25 / 56.70 area where are the first resistance to the current ST up movement. To the downside, watch out Friday Bottom at 55, then 54.70 and finally 54 area.

If we go down to these latter levels, the channel would be broken, probably re-tested but not valid anymore. If we stay inside, it still provides indication for trading the uptrend.

Always remember that is dangerous to catch a falling knife, so let volatility calm down a little bit.

Stay Safe

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

Technical analysis recommendations for EUR/USD and GBP/USD on December 2

EUR / USD

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On Friday, the players on the upside showed activity and made an attempt to change the situation, which they partially succeeded. The other day, opportunities were formed for an upward correction and the weeks closed with a candle of uncertainty, but it was not possible to significantly change the mood of the month on its last day. As a result, it can be stated that it is important for the players on the downside to stay in the bearish zone relative to the daily cloud, maintain support for the weekly short-term trend and securely gain a foothold below the monthly minimum (1.0981). The most significant resistance zone is now located in the range 1.1030 - 1.1082 (daily cloud + daily cross + weekly levels). Now, consolidating above can serve to further strengthen the players to increase, with the goal of testing for strength the most important levels of this section, located in the area 1.1145 (monthly Tenkan + weekly Kijun).

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In the lower halves, the players on the upside consolidated above the key supports 1,1009-12 (central Pivot level + weekly long-term trend). Therefore, they have an advantage. Now, the weakening factors are the circumstances that the pair is in the downward correction zone, the development of which technical indicators support by a majority of votes. On the other hand, resistance of the classic Pivot levels 1.1037 - 1.1056 - 1.1084 can act as upward guides within the day today. In case of consolidation under the supports (1.109-12), the update of the minimum extremum of November (1.0981) will be of primary importance, then 1.0962 (S2) - 1.0943 (S3) can provide support.

GBP / USD

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The players on the upside managed to close November with an ideal Doji candlestick, which in this place contains quite good bullish opportunities, hidden until the players on the upside updated the maximum extremum of 1.3012. Meanwhile, the breakdown of the weekly cloud and consolidation above the zone of inhibition and uncertainty can return bullish activity comparable to October activity to the market. The next resistance is the monthly Kijun (1.3167). The daily cloud (the upper boundary of the region 1.2700 - 1.2750) and the weekly cross Ichimoku, strengthened by the monthly Tenkan (1.2577), continue to remain as supports.

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In the lower halves, uncertainty prevails, since the preferences of the analyzed technical instruments now diverge. Today and in the near future, the task of the players on the upside is to consolidate above the central Pivot level (1.2915), as well as the maximums of the last week (1.2950) and the zone of uncertainty of the higher halves (1.3012). For the opponent, in turn, it is important to take hold of the weekly long-term trend (1.2894) and go down to the lows of the previous week 1.2822 and November 1.2768 in this situation.

Ichimoku Kinko Hyo (9.26.52), Pivot Points (classic), Moving Average (120)

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Prospects for oil prices in December 2019

As you know, the largest volumes are traded in oil - North American WTI and North Sea Brent. There are several other grades of oil sold on world exchanges, including Shanghai Crude, traded for the yuan on the Shanghai INE exchange, but trading volumes there are much lower and comprise about 15-20% of futures trading on US exchanges.

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For the analysis of the grade WTI, futures, which are traded by conglomerate exchanges CME-NYMEX, I have a complete picture of what is happening, allowing me to draw the right conclusions about the dynamics of this grade. Given the fact that between WTI and Brent correlation reaches 98%, I use North American oil trading data for the analysis of the North Sea variety, taking into account the correction of +5-6 dollars per barrel.

To analyze the medium-term prospects of WTI, we will use data from the US Energy Information Agency - US EIA. This is what the agency suggests in its short-term forecast, published in mid-November (Fig. 1).

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Fig. 1: Prospects for the price of WTI crude oil until December 2019

The forecast from the US EIA suggests that until May 2020, the price of oil will decline and will reach about $50 per barrel, which will happen at the turn of April-May 2020. After that, during the high automobile season in the US, the price of WTI oil will grow rapidly and will reach $60 per barrel by the end of 2020.

Simultaneously with its forecast, the US EIA publishes a forecast for NYMEX traders made based on open positions. As you can see, traders of this exchange are more optimistic about the price of oil for the first half of next year and assumes a higher price than the agency. At the same time, the pessimism of traders' increases in the second half of the year, and by December their opinion already radically diverges from the opinion of the US EIA.

My observations of the report data tell me that the US Energy Information Agency is significantly adjusting its forecast as the situation develops, so for us, it will be optimal to accept this forecast as a roadmap for the coming months, taking into account additional data. For example, the US EIA suggests that the decline in oil prices in the first half of 2020 will be due to a surplus in the market that will reach 220-230 thousand barrels per day in the fourth quarter of 2019 and the first quarter of 2020, which will put negative pressure on the price.

However, before making conclusions, we need to look at how NYMEX options traders suggest the dynamics of oil quotes in the nearest January contract, which closes in mid-December, before the Christmas holidays (Fig. 1).

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Figure 2: Open interest in optional levels.

As follows from the LOFO contract, the boundaries of the market currently range from 50 to 60 dollars per barrel. Moreover, the largest strike (level) consisting of options such as put is located at around $55 per barrel, and the highest pain point of Max Pain option buyers is slightly higher, at level 56.

Usually, if there are no factors confirming a strong movement on the market, the price seeks to close the contract in the range of the Max Pain point values. However, as follows from the report on the obligations of traders published by the US Commodity Futures Commission, at the moment, the interest of participants in the oil market is at its lowest levels since 2016, which can be interpreted as a bearish pattern.

At the same time, the number of put options is less than the number of call options in the ratio of 73 to 100, which indicates that the crowd is more prone to purchases than to sales. This, in turn, facilitates the movement of the oil price down, but the level 55 is located on the path of this movement, like a persistent tin soldier. In this regard, the struggle for this level is a serious one.

In the context of the data at my disposal, I assume that the price can and most likely will go down. However, in the next two weeks this will be due to certain difficulties associated with the closure of the January option contract, which expires on December 16, but then, we could see a drop in WTI oil to a depth of $50 per barrel, which for Brent will correspond to level 55-56 dollars.

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Elliott wave analysis of GBP/JPY for December 2 - 2019

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GBP/JPY remains lock in a sideways correction below short-term important resistance at 141.69. However, it can be a matter of time before this resistance is broken before it starts to lift higher to 143.19 and 144.58 as the next upside targets.

Support is seen at 141.33 and 141.09. This support-zone may protect the downside for a clear break above 141.69 and higher to 143.19.

R3: 142.57

R2: 142.14

R1: 141.69

Pivot: 141.58

S1: 141.33

S2: 141.09

S3: 140.61

Trading recommendation:

We are long GBP from 140.12 with our stop placed at 139.85

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Elliott wave analysis of EUR/JPY for December 2 - 2019

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EUR/JPY has broken above resistance at 120.68 confirming the next upside attack towards 121.40 and 121.98 on the way higher towards 123.55. The former resistance at 120.68 turns into the support level. A break below will not be critical. Only a break below support at 120.32 will indicate a more substantial correction unfolding but this is not our preferred count at this point. So, look for solid support in the 120.32 - 120.68 area for the next rally higher to 121.40 and 121.98.

R3: 121.98

R2: 121.40

R1: 121.13

Pivot: 120.68

S1: 120.32

S2: 120.05

S3: 119.80

Trading recommendation:

We are long EUR from 117.25 and we will raise our stop to 120.25.

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Technical analysis: Important intraday Level For EUR/USD, December 02,2019

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When the European market opens, such economic data as Final Manufacturing PMI, German Final Manufacturing PMI, Italian Manufacturing PMI, French Final Manufacturing PMI, and Spanish Manufacturing PMI will be unveiled. The US will publish such eocnomic reports as ISM Manufacturing Prices, Construction Spending m/m, ISM Manufacturing PMI, and Final Manufacturing PMI.So, amid the reports, EUR/USD will move in a low to medium volatility during this day. TODAY'S TECHNICAL LEVEL:Breakout BUY Level: 1.1073. Strong Resistance: 1.1067. Original Resistance: 1.1056. Inner Sell Area: 1.1045. Target Inner Area: 1.1019. Inner Buy Area: 1.0993. Original Support: 1.0982. Strong Support: 1.0971. Breakout SELL Level: 1.0965. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important intraday Level for USD/JPY, December 02,2019

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Japan will release such economic reports as the Final Manufacturing PMI, and Capital Spending q/. The US will unveil such economic data as ISM Manufacturing Prices, Construction Spending m/m, ISM Manufacturing PMI, and Final Manufacturing PMI. So, there is a probability that the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance.3:110.28.

Resistance. 2:110.08.

Resistance. 1:109.87.

Support. 1:109.57.

Support. 2:109.35.

Support. 3:109.15.

(Disclaimer)

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Forecast for EUR/USD on December 2, 2019

EUR/USD

The euro worked out the entire range of the previously noted consolidation of 1.0985-1.1026 onFriday. Today, in the Asian session, the price expects the arrival of new impulses for further movement. On the daily chart, the situation is rising - the price is above the MACD line and the Marlin oscillator formed a weak convergence. Growth prospect - the area of convergence of the Fibonacci level of 123.6% with the embedded line of the price channel at the price of 1.1075.

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Despite the unambiguous testimony of technical indicators, this scenario is by no means unambiguous. Oil slumped 4.63% (WTI) on Friday, natural gas fell 7.60%, copper dropped 1.30%. Such a movement in the commodity sector cannot but pull the currency market, especially since the closest target for WTI crude oil is seen at 50.60 (June 5 low, which is -8.7%). According to ISM, the November manufacturing activity index for the US manufacturing sector, released today, is expected to rise from 48.3 to 49.2. All these factors can turn the euro down even from current levels, especially since the price has not yet fixed itself above the MACD line, for this you need to close the daily session above this line.

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On the four-hour chart, the price is also above the MACD line, it has already consolidated here, but the exit may turn out to be false - during periods of consolidation, especially when the MACD line is horizontal, the price can wind up on it without stress. In addition, the signal line of the Marlin oscillator did not penetrate deep into the growth zone and can return back to the territory of negative numbers.

So, we are waiting for the completion of correctional growth and, with the price going below 1.0985, a further decline in the euro to target levels of 1.0925, 1.0895.

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Forecast for GBP/USD on December 2, 2019

GBP/USD

The British pound continues to form a kind of fourth peak on the daily chart. To do this, it still needs to grow by 70-90 points and also return to the bottom of the formation in the region of 1.2790. The growth may last slightly higher, to the high of the first peak on October 21 at the price of 1.3012. The signal line of the Marlin Oscillator is in the declining trend zone, but this does not prevent the price from growing short-term.

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In the main version, the growth may end in the range of Fibonacci levels of 100.0-110.0% on a four-hour chart (1.2975/95). The option of price growth in the short term is strengthened by today's gap, which has not yet been closed. The Marlin Oscillator on H4 in the growth zone.

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Forecast for AUD/USD on December 2, 2019

AUD/USD

The Australian dollar began to show signs of a reversal in the upward correction without testing the support of the embedded price channel line on the daily chart. Such a sign is the reversal of the signal line of the Marlin oscillator. The closest target is the resistance of the MACD line (0.6795).

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On a four-hour chart, the price is between the lines of MACD and balance, the signal line of the Marlin oscillator develops in its own range. The standard scenario assumes a downward turn of the line and a corresponding price fall, but the range should be broken sometime, and taking into account the Marlin readings on the daily chart, it can be broken today by the exit of the signal line and price up.

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Oil collapsed 4.63% (WTI) on Friday, natural gas fell 7.60%, copper -1.30%. We are waiting for the completion of the correction and the aussie to further fall under pressure from the US dollar and related markets.

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Control zones for AUD/USD on 12/02/19

The downward movement of the pair remains a medium-term impulse, and thus, holding a short position is the main plan. On the other hand, closing of trading in November occurred at almost the minimum of the month. This indicates a high interest of market sellers who make trading at less favorable prices.

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Working in the downward direction will be the main plan in the first week of December. The goal of the reduction is the Weekly Control Zone of 1/2 0.6739-0.6733. Now, reaching the zone will close most of the sales.

The proximity of the target zone Weekly Control Zone 1/2 suggests the need to consider the formation of a correctional model. If the zone test leads to an increase in demand and the pattern of "absorption" or "false breakdown" is formed, then purchases from the Weekly Control Zone 1/2 will come forward.

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

Weekly CZ - weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. The zone that reflects the average volatility over the past year.

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Control zones EURUSD 12/2/2019

A sharp increase in demand at the US session on Friday made it possible for us to test the first resistance zone of the WCZ 1/4 1.1020-1.1017. If consolidation above this zone does not occur, then the fall will resume on Monday. The first goal of the decline will be the low of the previous week.

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Work in the downward direction remains a priority. The main purpose of the fall is the weekly control zone 1.0953-1.0939, the probability of reaching which is at 75%.

An alternative model will be developed if the pair consolidates above the WCZ 1/4 at the US session on Monday. This will make it possible for you to consider growth to WCZ 1/2 1.1060-1.1053. The test of this zone will be decisive for the entire downward movement of November.

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

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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