EUR/USD: plan for the European session on December 3. Euro may continue to grow, but it's better to buy after a correction

To open long positions on EURUSD you need:

Weak US manufacturing activity reports and new White House administration fees for Argentina and Brazil have weakened the US dollar and lifted the euro. At the moment, the upward correction may continue, however, it is best to open long positions after the formation of a false breakout in the support area of 1.1059, or buy EUR/USD immediately for a rebound from 1.1034. A more important task for the bulls will be to break through and consolidate above the resistance level of 1.1088, however, this will be possible only after a good report on producer prices in the eurozone, which is scheduled for release in the first half of the day. Economists expect prices to remain unchanged in November. A break of 1.1088 will lead to an update of the highs 1.1109 and 1.1131, where I recommend profit taking.

To open short positions on EURUSD you need:

Bears will count on unsuccessful consolidation above the resistance of 1.1088, and updating yesterday's high with divergence forming on the MACD indicator will be the first signal to open short positions in the euro, the purpose of which will be support at 1.1059, but a return to the support level of 1.1034 is more important, which is where I recommend profit taking. It is in the region of 1.1034 that buyers will try to build the lower boundary of the new rising channel. With a EUR/USD growth scenario above the resistance of 1.1088 in the morning after good data on producer prices in the eurozone, it is best to consider short positions after updating the high of 1.1109, or sell immediately for a rebound from the resistance of 1.1131.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 moving averages, the test of which, in case of a downward correction, can lead to the formation of a new growth wave.

Bollinger bands

Growth will be limited by the upper level of the indicator in the area of 1.1109, while the lower boundary in the area of 1.1034 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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Dollar runs out of arguments, while euro and pound are able to resume growth

ISM's production report in November turned out to be worse than a month earlier. Contrary to forecasts, the decline has been observed for the fourth consecutive month in most sub-indices, including new orders and sector employment.

Moreover, ISM's index is at its lowest levels over the past 10 years, returning to the situation that preceded the election of D. Trump to the presidency of the United States. Dynamics, in turn, actually indicates that Trump's election program is losing including the development of the US manufacturing base.

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On Monday, the US Administration announced the restoration of the level of import duties for Argentina and Brazil on steel and aluminum. The formal reason for canceling the exceptions made earlier is "a substantial devaluation of their national currencies," but the matter is obviously more serious. On the other hand, Foreign Ministry spokesman Hua Chunying said Beijing imposes sanctions on a number of US non-governmental organizations, which is seen by the markets as a response to two US laws that China sees as interference in domestic affairs.

Due to the worsening of relations, the probability of concluding the first phase of a trade deal between the United States and China declined by the end of the year. Stock indices in the United States closed in the red zone and Asian indices lose an average of about 0.5%, although in general, the reaction of the markets is still restrained. At the same time, demand for gold is limited while the yen strengthened within the correction range. Nevertheless, the demand for bonds is also not observed, therefore, the demand for protective assets in the coming days will most likely remain weak.

EUR/USD

The euro zone's PMI in the manufacturing sector rose in November from 46.6p to 46.9p, which gives reasons for cautious optimism. Despite the fact that the index is still below the 50p border, the negative trend has ended, which may indicate a decrease in the risk of recession. On the other hand, the surprise index has risen, which indicates that published data is coming out in line with expectations or even better, which is a good sign of improving the business climate.

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On Monday, ECB's President Christine Lagarde spoke in the European Parliament and commented on the economic situation in the eurozone, explaining the weak growth by global factors that impede the growth of investor confidence. Now, a number of important indicators are coming out this week. In particular, Markit will present the PMI index in the services sector on Wednesday, and there will also be reports on retail sales and GDP for the 3rd quarter on December 5.

The euro rose significantly at the beginning of the week, responding to a number of factors, and the main of which was the decline of the dollar index to a weekly low after a series of Trump's posts on Twitter, and it is not only the return of duties on steel and aluminum, but also the Fed's demand to lower "overvalued" dollar, which affects the American farmers. Thus, it is clear that the Fed has reserves for lowering the rate, unlike the ECB, which will have to head deep into the negative territory for symmetrical measures. As a result, the euro may continue to grow if Fed's officials leave Trump's attack without comment.

Support is 1.1040/50 and with its decline, it is logical to buy in order to test the recent high of 1.1096 and the subsequent movement to 1.123.

GBP/USD

The PMI in United Kingdom also rose slightly in November, but the pound reacts much more modestly. The upcoming elections will remain the most important driver for the pound, according to YouGov's MRP model, the conservative party will receive an absolute majority, which will allow the UK to leave the EU on January 31, 2020.

Such an outcome would be supported by the pound if it weren't for one "but" - the Bank of England in November hinted at the possibility of lowering the rate, and now, the market assumes that this decline will occur at the meeting in January while another decline in the second half of 2020 is excluded.

Now, the pound remains in the range, but the probability of an exit above the resistance of 1.2975 / 85 with a subsequent breakthrough of 1.30 is increasing.

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Indicator analysis: Daily review on December 3, 2019, on GBP/USD currency pair

Trend analysis (Fig. 1).

On Tuesday, the price may continue to move up with the first target 1.2976, the resistance line of the side channel presented in a red bold line. In case of breaking through this level, the continuation of the upward movement to the upper fractal is 1.3013 presented in a blue dashed line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

On Tuesday, the price may continue to move up with the first target 1.2976, the resistance line of the side channel in a red bold line. In case of breaking through this level, the continuation of the upward movement to the upper fractal is 1.3013, presented in a blue dashed line.

Possible scenario: from the level of 1.2976, work down with the first target of 1.2823 that is the lower fractal.

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Indicator analysis: Daily review on December 3, 2019, on EUR / USD currency pair.

Trend analysis (Fig. 1).

On Tuesday, the first lower target is a pullback level of 23.6% which is equivalent to 1.1065 presented in a blue dashed line. If successful, the next lower target 1.1049 is the retracement level of 38.2% presented in a blue dashed line. From the level of 1.1049, we can expect upper work with the target of 1.1091, the upper 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 - down;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

On Tuesday, a pullback downward movement is possible.

The first lower target is the retreating level of 23.6% equivalent to 1.1065, presented in a blue dashed line. If successful, the next lower target 1.1049 is a retracement level of 23.6% presented in a blue dashed line. From the level of 1.1049, we can expect upper work with the target of 1.1091, the upper fractal in a blue dashed line. If the price does not fall below 1.1049, then we open up the market.

An unlikely, but possible scenario is a price fall down to a pullback level of 50% which is equivalent to 1.1037, presented in a blue dashed line.

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Trading plan for EURUSD for December 03, 2019

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Technical outlook:

EURUSD has dropped to 1.0981 on Friday. It was just 1 pip shy of the estimated support as discussed here before reversing sharply. This was an expected and bounce for EURO bulls to come back stronger and push through 1.1180 levels in the short term. Please, also make note that prices have bounced back from a convergence of Fibonacci 0.618 retracement and the past resistance turned support zone highlighted here. Immediate price targets are seen above 1.1110 and 1.1135 which would take out the next in line resistance as well. The pair may push higher towards 1.1500 during this bullish leg and prices are likely to stay above 1.0980. A break above the 1.1100 resistance would confirm that a meaningful bottom is in place. The pair may be volatile as well.

Trading plan:

Remain ling against 1.0980, target above 1.1180 and 1.1500.

Good luck!

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Elliott wave analysis of GBP/JPY for December 3 - 2019

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GBP/JPY dipped a bit lower than the expected support-zone between 141.09 - 141.33. The low has been seen at 140.87. Despite the deeper correction, nothing has changed and a new attack on the resistance at 141.69 is expected shortly for a continuation higher towards 143.19 and 144.58 as the next upside targets.

Support at 140.87 is likely to protect the downside for a more serious test of 141.69.

R3: 142.14

R2: 141.69

R1: 141.58

Pivot: 141.33

S1: 141.13

S2: 140.89

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 3 - 2019

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The support-zone between 120.32 - 120.68 stopped the minor correction from 120.92. EUR/JPY is ready for the next attack towards the upside for a rally towards 121.40 and 121.98 on the way higher to 123.55.

Support is now seen in the 120.49 - 120.64 area. It is likely to protect the downside for a clear break above 120.90 for the expected continuation higher to 121.40 and 121.98.

R3: 121.98

R2: 121.40

R1: 121.13

Pivot: 120.64

S1: 120.49

S2: 120.32

S3: 120.05

Trading recommendation:

We are long EUR from 117.25 with our stop placed at 120.25

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Close to an inflection point in financial markets?

Good morning all,

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Time to be net short Equities and USD are coming?

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AUD/USD. RBA December meeting: the central bank was "afraid" of the situation in the housing market, supporting the aussie

The Reserve Bank of Australia left all the parameters of monetary policy unchanged at today's meeting. In particular, the rate remained at 0.75%, after three rounds of decline this year. And although this fact was expected by the market, the Australian dollar strengthened against a basket of major currencies during the Asian session. The aussie approached the middle of the 68th figure when paired with the US currency, showing an upward impulse. Such price dynamics was determined not only by the results of the December meeting of the RBA, but also by other fundamental factors. This is a general weakening of the greenback against the background of the recent statements by Trump, and the restoration of the Chinese PMI in the manufacturing sector, and the increase in the cost of iron ore. All these circumstances gave impetus to the growth of AUD/USD - the wait-and-see attitude of the RBA only strengthened the position of the bulls of the pair.

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Although the results of the last meeting of the RBA this year cannot be called hawkish. The regulator's members agreed to pause until the beginning of next year, but at the same time made it clear that the monetary policy easing cycle has not yet been completed - the central bank is only evaluating the effectiveness of the measures already taken. In general, the announced pause (which, in fact, served as an impetus to the growth of AUD/USD) is forced. The fact is that the triple rate reduction did not pass without a trace for the Australian housing market: real estate prices sharply increased - especially in the country's largest cities. The cost of housing in Sydney rose in November by 2.7% (in monthly terms) - this is the strongest growth rate in the last 30 years. Melbourne also showed similar dynamics, where prices rose by 2.2% - this is the highest since 2015. Across the country, apartment and house prices jumped 1.7% MOM, recording the fifth consecutive increase on a monthly basis.

RBA interest rate cut this year led to the fact that the banking sector lowered mortgage rates, which, in turn, affected the housing market in Australia. According to some experts, the Australian real estate market has become almost the only beneficiary of easing monetary policy: according to the latest data, prices for apartments and houses (primarily in large metropolitan areas of the country) will reach their new peaks by March next year. Since the RBA lowered its interest rate in June for the first time in many years, the monthly growth rate of the CoreLogic national housing price index has been the strongest since 2003.

Obviously, in such circumstances, the RBA did not dare to aggravate the situation. Especially amid ongoing trade negotiations between Washington and Beijing. Until January-February of next year it will become clear whether the parties will sign a preliminary agreement (the so-called "phase 1") or whether the global conflict will continue. But in general, judging by the rhetoric of the accompanying statement, the RBA members are ready to further mitigate monetary policy. Recent macroeconomic reports suggest that the rate will almost certainly be reduced in 2020 - at least to 0.50%.

I note that at the beginning of this year, the Australian government initiated the introduction of tax benefits for millions of households (for people with low and middle incomes), in the hope of stimulating the growth of consumer spending. Household debt makes up almost 200% of total annual income, while consumer activity leaves much to be desired due to a decrease in the labor market (in particular, due to a weak increase in the level of salaries).

The latest report on the labor market really turned out to be devastating. The unemployment rate unexpectedly rose to 5.3% (against the forecast of 5.2%), and the employment rate collapsed into the negative area. Moreover, this indicator has updated three-year lows - the number of employees immediately fell by 19 thousand. The negative dynamics in October was demonstrated by both the component of full employment and the component of part-time employment. Let me remind you that the number of employees increased by only 16 thousand in September - but mainly due to the full-time component. However, the October results disappointed on all fronts.

The RBA commented rather cautiously on the above figures - according to them, the effect of the measures already taken is not yet fully felt. Nevertheless, if the labor market continues to decline further, the probability of a rate cut to 0.5% at the beginning of next year will reach one hundred percent.

Summing up, it should be noted that the Australian regulator, so to speak, was afraid of the situation in the housing market. This fact supported the aussie. At the same time, the RBA acknowledged that the prerequisites for easing monetary policy remain. Australia's third-quarter GDP growth data will play a key role in this context. The release is expected tomorrow, December 4.

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According to general forecasts, the Australian economy will grow by 1.6% on an annualized basis (0.5% on a quarterly basis). Over the past five quarters, the GDP indicator has been steadily declining, reaching a record low of 1.4% in the second quarter of 2019. If the release comes out at least at the forecast level, the Australian dollar will receive additional support, and paired with the US currency it will get an additional chance to approach the main resistance level of 0.70. If, contrary to forecasts, the indicator continues the negative trend, then the AUD/USD pair will return to the framework of the 67th figure.

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Technical analysis: Important intraday Level For EUR/USD, December 03,2019

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When the European market opens, such economic data as PPI m/m, Spanish Unemployment Change, and French Gov Budget Balance will be released. Wards Total Vehicle Sales from the US is due. So, amid the reports, EUR/USD will move in a low to medium volatility during this day. TODAY'S TECHNICAL LEVEL: Breakout BUY Level: 1.1127. Strong Resistance: 1.1121. Original Resistance: 1.1110. Inner Sell Area: 1.1099.Target Inner Area: 1.1073. Inner Buy Area: 1.1047. Original Support: 1.1036. Strong Support: 1.1025. Breakout SELL Level: 1.1019. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important intraday Level for USD/JPY, December 03,2019

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The 10-y Bond Auction, and Monetary Base y/y reports from Japan are on tap. The US will release such economic data as Wards Total Vehicle Sales. 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.3:109.69. Resistance. 2:109.47. Resistance. 1:109.26. Support. 1:108.99. Support. 2:108.78. Support. 3:108.56. (Disclaimer)

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Control zones USDCHF 12/3/2019

The pair's fall from yesterday led to the lower limit of the average weekly move. This makes it possible to close all sales opened during the WCZ 1/2 test. The probability of consolidation below the middle course zone is at 30% this week. This allows us to consider the formation of corrective upward movement until Friday.

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Sales from current grades are no longer profitable. You need to create a false breakout pattern of yesterday's low to buy from the middle course zone.

An alternative decline model will be developed if today's trading closes lower than yesterday. This will indicate a continued decline, the aim of which will be the November low. Sales at or below average speed are not recommended, as the likelihood of a return to the range will increase to 90%.

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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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Forecast for EUR/USD on December 3, 2019

EUR/USD

Yesterday, US President Donald Trump gave the markets another surprise - he restored the frozen duties for Brazil and Argentina at 25% for steel and 10% for aluminum. He also demanded that the Federal Reserve devalue the dollar in order to "protect American farmers." Of course, Trump is more interested in the Dow Jones index than the dollar exchange rate against currencies of near-default countries, but Trump would not be Trump if he missed such an occasion once again to show his influence on the Fed. The Dow Jones Index fell by 0.96% yesterday. The euro jumped 61 points. Thus, the convergence on the Marlin oscillator on the daily chart worked out, the target at the Fibonacci level of 123.6% and the embedded line of the price channel is fulfilled, a downward movement of prices is possible from current levels. The signal line of the Marlin oscillator began to unfold down from the boundary with the territory of the bulls. Consolidating the price above 1.1090, above yesterday's high, opens the target at the Fibonacci level of 110.0% 1.1155.

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The situation is simply growing on the four-hour chart, the price is above the indicator lines of balance and MACD, with the Marlin in the growth zone. The priority of reading the chart in the current situation behind the daily scale. A full-fledged declining situation will recover in the market after the price returns to the level of 1.0985. This is the main scenario.

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Control zones for USD/CAD on 12/03/19

During the second week, the pair is trading within the accumulation zone. This makes it possible to consider weekly extremes for finding entry points. The upper boundary is the maximum of the last week, which coincides with the Weekly Control Zone 1/2 1.3328-1.3319. Now, testing this zone will be decisive for the entire upward movement of the last month.

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Working within the framework of the flat implies partial consolidation of transactions during tests of significant extremes.

An alternative model will be developed if the closure of today's trading occurs above the Weekly Control Zone 1/2. This will open the way for further growth. The nearest goal, in turn, will be the maximum of October. The test of which will increase the probability of a large offer.

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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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Forecast for GBP/USD on December 3, 2019

GBP/USD

The British pound showed passive growth, despite yesterday's small market storm set up by Donald Trump with a rise in steel and aluminum duties for Brazil and Argentina. The price is currently at the close of Friday. Weak growth, or rather, the length of consolidation, is already putting downward pressure on the price - the Marlin oscillator signal line on the daily shows a reversal from the boundary with the growth territory. The purpose of the decline, as it was before, is the intersection point of the MACD line with a correction level of 23.6% at the price of 1.2765. The growth limit is determined by the starting point of consolidation from October 21 at the price of 1.3012.

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On the H4 chart, the Marlin indicator is hovering above the zero neutral line. With further inaction on the part of the market, the signal line will go into the negative zone and create a technical impetus for the price to move down. Consolidating the quote at 1.2895 - under the MACD line and the correction level of 61.8%, will be the first signal to move to the first target 1.2817 (Fibonacci 23.6%). Next, a daily target of 1.2765 opens.

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Forecast for USD/JPY on December 3, 2019

USD/JPY

The quote of the USD/JPY currency pair did not reach 16 points to the target level of 109.90 formed by the green line of the ascending price channel. The price sharply turned on the news of a significant increase in duties on steel and aluminum for Brazil and Argentina. The S&P 500 index lost 0.86%, while the Nikkei 225 is down 0.84% today. It is very likely that the pair has reversed into a medium-term decline. The Marlin oscillator on the daily chart is being introduced into the negative trend zone.The immediate goal is the intersection of the MACD line with the red price channel line at 108.50. Leaving prices below the level opens the second goal at 107.58 - the area of intersection of the lines of rising and falling price channels.

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On a four-hour chart, the divergence on Marlin formed and worked out in one day. Price went below the MACD line. We are waiting for the development of a downward movement.

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Comprehensive analysis of movement options of #USDX vs EUR/USD vs GBP/USD vs USD/JPY (H4) for December 3

This week is the first week of winter. Now, here's a comprehensive analysis of movement options of #USDX, EUR/USD, GBP/USD and USD/JPY (H4) for December 3, 2019 on the Minuette operational scale forks.

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The development of the #USDX (US dollar index) movement for December 3, 2019 will be determined by the development and direction of the breakdown of the 1/2 Median Line channel (98.25 - 98.15 - 98.07) of the Minuette operational scale forks. The details of the options for this movement is presented on the animated chart.

The breakdown of the lower boundary of the 1/2 Median Line Minuette channel (support level of 98.07) is the continuation of the downward movement of #USDX to the equilibrium zone (98.00 - 97.82 - 97.65) of the Minuette operational scale forks.

On the contrary, the breakdown of the resistance level of 98.25 on the upper boundary of the 1/2 Median Line channel of the Minuette operational scale forks will make it relevant to resume the upward movement of the dollar index to the equilibrium zone (98.47 - 98.82 - 99.15) of the Minute operational scale forks.

Details of the movement options of #USDX are presented on the animated chart.

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Euro vs US dollar

The development of the EUR/USD (European currency/US dollar) for December 3, 2019 will also be determined by the development and direction of the breakdown of the 1/2 Median Line channel (1.1023 - 1.1035 - 1.1050) of the Minuette operational scale forks. The details of the options for this movement is presented on the animated chart.

The breakdown of the upper boundary of the 1/2 Median Line Minuette channel (resistance level of 1.1050) - will lead to the continuation of the development of the EUR/USD movement in the equilibrium zone (1.1050 - 1.1070 - 1.1085) of the Minuette operational scale forks, and in case of breakdown ISL61.8 Minuette (1.1085), it will become possible for the price of the instrument to reach the boundaries of the 1/2 Median Line channel (1.1100 - 1.1133 - 1.1165) of the Minuette operational scale forks.

Alternatively, the breakdown of the lower boundary of the 1/2 Median Line channel (support level of 1.1023) of the Minuette operational scale forks will determine the continuation of the downward movement of the single European currency towards the targets: the final Schiff Line Minuette (1.1000) - the initial SSL Minuette line (1.0992) - the LTL Minuette control line (1.0981 - local minimum), with the prospect of reaching the upper boundary of ISL38.2 (1.0910) equilibrium zone of the Minuette operational scale forks.

Details of the movement options of EUR/USD are shown on the animated chart.

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Great Britain pound vs US dollar

Similarly to other currencies, GBP/USD (Great Britain pound/US dollar) will begin to develop its movement depending on the development and direction of breakdown of the boundaries of the 1/2 Median Line channel (1.2930 - 1.2950 - 1.2975) of the Minuette operational scale forks. The development options for the boundaries of this channel are shown on the animated chart.

Consecutive breakdown of resistance levels :

- 1.2975 - the upper boundary of the 1/2 Median Line Minuette channel;

- 1.3000 - the final Schiff Line of the Minuette operational scale forks;

will lead to the continuation of the upward movement of GBP / USD to the equilibrium zone (1.3030 - 1.3060 - 1.3090) of the Minuette operational scale forks.

On the other hand, the return of Her Majesty's currency below the support level of 1.2930 (the lower boundary of the 1/2 Median Line channel of the Minuette operational scale forks) - will give rise to make option to continue the development of movement towards the goals: control line LTL Minuette (1.2860) - local minimums (1.2824 - 1.2769) - upper boundary ISL38.2 (1.2745) equilibrium zone of the Minuette operational scale forks.

Details of the movement options of GBP/USD can be seen on the animated chart.

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US dollar vs Japanese yen

Likewise, the movement of USD / JPY (US dollar/currency of the "land of the rising sun") for December 3, 2019 will depend on the development and direction of breakdown of the boundaries 1/2 Median Line channel (109.60 - 109.41 - 109.25) of the Minuette operational scale forks. The details of the movement options are seen on the animated chart.

The breakdown of the lower boundary of the 1/2 Median Line channel (support level of 109.25) of the Minuette operational scale forks - will lead to the continuation of the downward movement of USD/JPY to the boundaries of the 1/2 Median Line channel (109.10 - 108.85 -108.58) of the Minuette operational scale forks with the prospect of updating the local minimum 108.26.

On the other hand, the return of the "country of the rising sun" currency above the resistance level of 109.60 on the upper boundary of the 1/2 Median Line Minuette channel will make the development of movement towards the goals relevant: the warning line UWL38.2 Minuette (109.80) - the initial line SSL Minuette (109.90) - the control line UTL (110.00) of the Minuette operational scale forks - the final Schiff Line Minuette (110.15) with the prospect of reaching the lower boundary of the ISL38.2 (110.75) equilibrium zone of the Minuette operational scale forks.

Details of the movement options of USD/JPY can be seen on the animated chart.

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The review is made without taking into account the news background. Thus, the opening of trading sessions of the main financial centers does not serve as a guide to action (placing orders "sell" or "buy").

The formula for calculating the dollar index :

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

where the power coefficients correspond to the weights of the currencies in the basket:

Euro - 57.6% ;

Yen - 13.6% ;

Pound Sterling - 11.9% ;

Canadian dollar - 9.1%;

Swedish Krona - 4.2%;

Swiss franc - 3.6%.

The first coefficient in the formula leads the index to 100 at the start date of the countdown - March 1973, when the main currencies began to be freely quoted relative to each other.

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Fractal analysis of major currency pairs for December 3

Forecast for December 3:

Analytical review of currency pairs on the scale of H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1170, 1.1130, 1.1114, 1.1096, 1.1065, 1.1048 and 1.1024. Here, the price has canceled the development of the downward trend and at the moment, we are following the formation of the expressed initial conditions for the top of November 29. Now, the continuation of the movement to the top is expected after the breakdown of the level of 1.1096. In this case, the target is 1.1114, wherein price consolidation is in the range of 1.1114 - 1.1130. Meanwhile, the breakdown of the level of 1.1130 will lead to the development of pronounced movement. Here, the potential goal is 1.1170.

Short-term downward movement is expected in the range of 1.1065 - 1.1048. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 1.1024. This level is a key support for the upward structure.

The main trend is the formation of initial conditions for the top of November 29

Trading recommendations:

Buy: 1.1096 Take profit: 1.1146

Buy: 1.1132 Take profit: 1.1170

Sell: 1.1065 Take profit: 1.1050

Sell: 1.1046 Take profit: 1.1026

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3075, 1.3043, 1.2994, 1.2957, 1.2903, 1.2873, 1.2842 and 1.2817. Here, we are following the formation of the initial conditions for the upward cycle of November 27. Now, the continuation of the movement to the top is expected after the breakdown of the level of 1.2957. In this case, the target is 1.2994, wherein price consolidation is near this level. On the other hand, the breakdown of the level of 1.2995 should be accompanied by a pronounced upward movement. Here, the target is 1.3043. For the potential value for the top, we consider the level of 1.3075. Upon reaching this level, we expect consolidation as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 1.2903 - 1.2873. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.2842. This level is a key support for the top.

The main trend is the formation of the ascending structure of November 27

Trading recommendations:

Buy: 1.2957 Take profit: 1.2992

Buy: 1.2996 Take profit: 1.3043

Sell: 1.2903 Take profit: 1.2875

Sell: 1.2870 Take profit: 1.2844

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9979, 0.9953, 0.9935, 0.9899, 0.9864 and 0.9820. Here, we are following the formation of the downward structure of November 29. Now, the continuation of movement to the bottom is expected after the breakdown of the level of 0.9899. In this case, the target is 0.9864, wherein price consolidation is near this level. At the same time, the breakdown of the level of 0.9864 should be accompanied by a pronounced upward movement. In this case, the potential target is 0.9820. A rollback to correction from this level is expected.

Short-term upward movement is possibly in the range of 0.9935 - 0.9953. The breakdown of the latter value will lead to in-depth movement. Here, the target is 0.9979. This level is the key support for the downward structure of November 29.

The main trend is the formation of initial conditions for the bottom of November 29

Trading recommendations:

Buy : 0.9935 Take profit: 0.9952

Buy : 0.9955 Take profit: 0.9976

Sell: 0.9897 Take profit: 0.9866

Sell: 0.9862 Take profit: 0.9822

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For the dollar / yen pair, the key levels on the scale are : 109.72, 109.47. 109.27, 109.11, 108.85, 108.61 and 108.31. Here, the price forms the potential for the downward movement of December 2. Now, the continuation of movement to the bottom is expected after the breakdown of 108.85. Here, the target is 108.61, wherein price consolidation is near this level. For the potential value for the bottom, we consider the level of 108.31. The movement to which is expected after the breakdown of the level of 108.60.

Short-term upward movement is expected in the range 109.11 - 109.27. The breakdown of the last value will lead to an in-depth correction. Here, the target is 109.47. This level is a key support for the downward structure.

Main trend: building potential for the downward movement of December 2

Trading recommendations:

Buy: 109.11 Take profit: 109.26

Buy : 109.28 Take profit: 109.45

Sell: 108.85 Take profit: 108.63

Sell: 108.58 Take profit: 108.33

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3404, 1.3387, 1.3355, 1.3334, 1.3311, 1.3298, 1.3278 and 1.3250. Here, we are following the ascending structure of November 19. Now, the continuation of the movement to the top is expected after the breakdown of the level of 1.3311. In this case, the first target 1.3334. Meanwhile, short-term upward movement is expected in the range of 1.3334 - 1.3355. The breakdown of the last value should be accompanied by a pronounced upward movement. Here, the target is 1.3387. Price consolidation, in turn, is in the range of 1.3387 - 1.3404 and from here, we expect a correction.

Short-term downward movement, as well as consolidation are possible in the range of 1.3298 - 1.3278. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3250. This level is a key support for the upward structure.

The main trend is the upward structure of November 19, the correction stage.

Trading recommendations:

Buy: 1.3311 Take profit: 1.3333

Buy : 1.3335 Take profit: 1.3355

Sell: 1.3276 Take profit: 1.3252

Sell: 1.3248 Take profit: 1.3220

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6878, 0.6851, 0.6830, 0.6807, 0.6797 and 0.6781. Here, we are following the formation of the expressed initial conditions for the top of November 29. The continuation of the movement to the top is expected after the breakdown of the level of 0.6830. In this case, the target is 0.6851, wherein price consolidation is near this level. On the other hand, the breakdown of the level of 0.6851 will lead to a marked development of the upward trend. Here, the potential target is 0.6878. Price consolidation is near this value.

Short-term downward movement is expected in the range of 0.6807 - 0.6797. The breakdown of the last value will lead to an in-depth correction. Here, the target is 0.6781. This level is a key support for the upward structure.

The main trend is the formation of expressed initial conditions for the top of November 29

Trading recommendations:

Buy: 0.6830 Take profit: 0.6848

Buy: 0.6853 Take profit: 0.6878

Sell : 0.6807 Take profit : 0.6797

Sell: 0.6795 Take profit: 0.6783

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For the euro / yen pair, the key levels on the H1 scale are: 122.10, 121.90, 121.55, 121.29, 120.97, 120.58, 120.34 and 120.10. Here, we are following the local ascending structure of November 22. The continuation of the movement to the top is expected after the breakdown of the level of 120.97. In this case, the goal is 121.29. Price consolidation is near this level. Short-term upward movement is in the range of 121.29 - 121.55. The breakdown of the level of 121.55 should be accompanied by a pronounced upward movement. Here, the goal is 121.90. For the potential value for the top, we consider the level of 122.10. Upon reaching which, we expect consolidation in the range of 121.90 - 122.10, as well as a pullback to the bottom.

Short-term downward movement is expected in the range of 120.58 - 120.34. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 120.10. This level is a key support for the top.

The main trend is the local ascending structure of November 22

Trading recommendations:

Buy: 120.98 Take profit: 121.25

Buy: 121.30 Take profit: 121.55

Sell: 120.58 Take profit: 120.36

Sell: 120.32 Take profit: 120.10

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For the pound / yen pair, the key levels on the H1 scale are : 143.45, 143.09, 142.50. 142.06, 141.15, 140.72 and 140.24. Here, we are following the development of the upward cycle of November 22. Short-term upward movement is expected in the range of 142.06 - 142.50. The breakdown of the last value will lead to a pronounced movement. Here, the goal is 143.09. For the potential value for the top, we consider the level of 143.45. Upon reaching this level, we expect a departure in the correction.

Short-term downward movement is possibly in the range of 141.15 - 140.72. The breakdown of the latter value will lead to an in-depth correction. Here, the goal is 140.24. This level is a key support for the top.

The main trend is the upward structure of November 22.

Trading recommendations:

Buy: 142.06 Take profit: 142.50

Buy: 142.52 Take profit: 143.07

Sell: 141.15 Take profit: 140.74

Sell: 140.70 Take profit: 140.26

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

EURUSD and GBPUSD: ECB President Christine Lagarde has no reason to rejoice. Pound trading continues to be restrained

The euro slightly weakened against the US dollar in the morning, however, market volatility remained quite low, as all attention today is shifted to the speech of European Central Bank President Christine Lagarde. If her first appearance in this position was very restrained and did not concern interest rates and monetary policy, today, statements of a different kind are expected. Many analysts expect Lagarde to announce interest rates for next year and announce what changes in monetary policy will await the eurozone in the future.

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It is expected that the ECB will keep rates unchanged in 2020, but do not exclude the possibility of their decrease by 10 bp In this case, it is a key interest rate, not a deposit rate. Such decisions will be connected directly with what economic growth the euro region will show, as well as at what rate inflation will increase. If it remains unchanged at the level of 1%, then another intervention by the regulator is not ruled out. You should not discount the risk of a recession, which will also lead to a change in the policy of interest rates, as well as a more extensive bond redemption program.

Regarding today's reports, the eurozone manufacturing sector continues to show a contraction in November this year amid low export volumes and trade wars waged by the United States with China and the eurozone. France alone managed to maintain, albeit low, growth in production activity.

According to the report, the Purchasing Managers Index for Italy's manufacturing sector slightly fell to 47.6 points this November, compared with 47.7 points in October while the economists forecast 47.7 points. In Germany, a similar index of PMI for the manufacturing sector rose to 44.1 points in November against 42.1 points in October and a forecast of 43.8 points.

As I noted above, only France was able to cope with the slowdown in the sector. The indicator for the manufacturing sector grew 51.7 points in November against 50.7 points in October and a forecast of 51.6 points. Let me remind you that an indicator above 50 points indicates an increase in activity, and below - its decline.

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On the whole, in the eurozone, PMI for the manufacturing sector remained below 50 points and reached only 46.9 points in November compared to 45.9 points in October.

From a technical point of view, the pair did not undergo significant changes, and low volatility did not make it possible to go beyond the side channel of 1.0990-1.1040. If the bears miss the resistance of 1.1040, the demand for the euro may return, which will quickly lead to the renewal of the highs of 1.1060 and 1.1090. If after data on activity in the US manufacturing sector the pressure on the euro returns, a break of 1.1010 will provide a new influx of sellers capable of returning the trading instrument to a low of 1.0990 and updating it around 1.0970.

GBPUSD

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Buyers of the British pound were also not very pleased with indicators of activity in the UK manufacturing sector, which fell in November this year. However, it should be noted that the decline was not as strong as previously expected. The report indicated that uncertainty with Brexit continues to exert negative pressure, as well as a general slowdown in the global economy. The reduction in inventories of manufacturers and their customers after another Brexit date is also one of the main causes of weakness in the sector. According to IHS Markit and CIPS, the PMI for the UK manufacturing sector was 48.9 points, compared with a preliminary estimate of 48.3 points.

As for the technical picture of the GBPUSD pair, for more confident growth to continue, the bulls need to break through the upper boundary of the downward channel in the region of 1.2940, which will lead to the pound's growth to a high of 1.2970 and the update of resistance at 1.3015. However, opinion polls will be more important, a reduction in which the advantage of the Conservative Party's leadership could lead to a powerful sell-off of the British pound with a return to the lows of 1.2830 and 1.2790.

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

Fall of the crypto king: bitcoin was in a difficult position

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The world's leading cryptocurrency survived the most unfavorable month in 2019. According to analysts, November has become a test for BTC. Nevertheless, they expect its position as the number one cryptocurrency to be restored next year.

According to experts, bitcoin demonstrated the most impressive collapse of the year in November: BTC losses amounted to nearly 18%. A similar collapse was recorded only in November 2018, when bitcoin "lost weight" by 37%.

In the last month of autumn, the leading cryptocurrency lost about 30% of its previous monthly high. On Monday morning, December 2, BTC regained some of the lost ground. Currently, bitcoin is trading between $7359– $7360.

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The BTC/USD pair is trying to get out of the downward range, but these attempts are successful. Today, the pair managed to slightly reverse the downward trend, rising in the moment to $7400. BTC again fell in the future.

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According to the observations of market participants, November has always been a good month for bitcoin: most often, the leading cryptocurrency finished it in positive territory. However, this year this tradition has been broken. According to preliminary estimates, BTC fell from $14,000 to $7,500 and below. This factor is compounded by the bearish moods that dominate the cryptocurrency market. Many experts believe that bitcoin will slightly fall before the new year, but will later regain lost ground.

Some BTC support was provided by current news. In Germany, a law was passed allowing banks to buy and sell digital assets with an appropriate license. Customers of a number of financial institutions in Germany will be able to use online banking services, including operations with virtual currencies.

Most analysts are optimistic about the short and medium term prospects of bitcoin. Many experts believe that crypto is not over yet, so it's too early to draw conclusions about the dynamics of BTC. Experts are certain that the leading cryptocurrency will meet with new forces next year and will be able to catch up.

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

EUR/USD. Trump enraged: the US president put pressure on the dollar

Just a few days ago - on the last trading day of November - the euro-dollar pair tested the lower boundary of the price range of 1.0970-1.1090 (the boundaries of which correspond to the lower and middle lines of the BB indicator on the daily chart). The bears clearly intended to gain a foothold in the ninth figure in order to finally escape from the swamp of a weeks-long flat. But on Friday, buyers unexpectedly seized the initiative: firstly, many traders on the eve of the weekend and the end of the month took profits, and secondly, the fundamental background for the dollar began to gradually turn into gloomy tones.

And today, in my opinion, what happened was supposed to happen on Friday: the EUR/USD pair came close to the upper boundary of the above price band, updating the one and a half week high. True, today's price growth took place not due to the strengthening of the European currency (amid an unexpected increase in inflation in the eurozone), but due to the weakening of the US currency, which slumped throughout the market. A direct reason for the decline in the dollar index was Trump's statement that he returns protective duties on all steel and aluminum from Argentina and Brazil. Before that, he criticized these countries, accusing them of deliberately depreciating their national currencies and thereby increasing their competitiveness. According to US media, this year Brazil ranked second in the list of major steel suppliers to the United States. The share of this Latin American country in total imports reached 17%, and the volume of deliveries reached almost four million tons. As for Argentina, this country accounts for about 0.5% of the total imports of steel products by the United States.

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Trump also criticized the Federal Reserve again. And although the market is quite calm about such statements (which are voiced with enviable regularity), this time traders reacted violently to his words. The fact is that recently the president held an unplanned meeting in the White House with the Fed chief. According to the results of the audience, Trump spoke warmly enough about Powell, which was not there for several years. According to him, they even discussed negative interest rates, although the Fed subsequently officially denied this statement. And now, after only a few weeks, the US regulator was again under the yoke of political criticism: the head of the White House cited the Fed "as an example" Latin American countries, which cheapen their currencies, actually using the expensive dollar to their advantage. Against this background, Trump categorically urged the Fed to soften monetary policy.

As I said above, the US president regularly voices criticism of the Fed. But in this case, he connected the tariff wars with the dollar, or more precisely, with the uncertain actions of the US regulator to mitigate the parameters of monetary policy. According to some experts, this fact is an alarming signal: according to them, a trade war in the near future will inevitably be supplemented by military actions in the foreign exchange market. Donald Trump, by and large, is naturally outraged by the Fed policy - after all, the regulator, with its expectant position, is now fueling the growth of the US currency. The strengthening of the dollar partly eliminates the sanction effect of existing duties - both in relation to China and in relation to other countries. The same goes for the euro/dollar pair, which this year updated its two-year low. Further growth of the dollar will only aggravate this situation, causing a corresponding reaction of the White House.

Against the background of Trump's angry tweets and the introduction of duties on all steel and aluminum from Brazil and Argentina, the US manufacturing index ISM remained in the shadow. Although, on the other hand, this release only added to the negative fundamental picture for the dollar. Instead of the projected growth, the indicator, firstly, remained below the key 50-point mark, and secondly, it entered the red zone, reaching the level of 48.1. For comparison: this indicator reached the level of 59.3 in November last year. Such weak dynamics only increased pressure on the US currency.

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In the shadow of the high-profile events of the US session today, the speech of the ECB President Christine Lagarde, who spoke with deputies of the European Parliament, remained. Although her rhetoric was controversial: she noted the weak growth of the eurozone economy in the third quarter (explaining this by the negative influence of global factors) and recognized the effectiveness of the ECB's adaptive policy, which, according to her, would remain "for a long time." On the other hand, she acknowledged the presence of side effects of the super-soft policy of the ECB. Lagarde also pointed to increased consumption in the eurozone, a stronger labor market and higher wages.

Thus, the inconsistent and inarticulate rhetoric of Lagarde remained outside the attention of the market - Trump became the No. 1 newsmaker today. He made it possible for bulls of the EUR/USD pair to seize the initiative and reach the upper limit of the price range of 1.0970-1.1090. However, buyers, as well as bears, could not get out of the specified band. By and large, the pair remained within the flat, although the EUR/USD bulls made a serious bid for victory today. If buyers can still overcome the 1.1090 barrier, then the next level of resistance will be the 1.1140 mark - this is the Kijun-sen line on the weekly chart.

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

GBP/USD. December 2. Results of the day. Trump declares trade wars to Argentina and Brazil. Who is next?

4-hour timeframe

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Amplitude of the last 5 days (high-low): 78p - 69p - 89p - 52p - 63p.

Average volatility over the past 5 days: 70p (average).

The GBP/USD currency pair continues to trade inside the 200-point side channel and, while the euro/dollar pair has shown an impressive upward movement, continues to ignore any news and macroeconomic data. On the 4-hour chart, all the movements of the pair now look quite powerful. However, do not forget that the terminal automatically adjusts the scale of any instrument to the chart window. The real picture of things is more clearly visible on the 24-hour timeframe, where the flat catches your eye even from a kilometer distance. Despite the fact that today the pound/dollar pair has shown strengthening by as much as 50 points, we can not call this movement "strong" or "trending", or "the beginning of a new trend". We cannot ascertain the completion of a flat. We can only say that the traders of the currency pair continue to ignore any information that comes to their disposal, both the one regarding the confrontation between Conservatives and Labour, as well as the parliamentary elections in 2019, and the one that concerns the economy of Great Britain and the United States.

Markit published an index of business activity in the UK manufacturing sector today, December 2, which showed an improvement to 48.9 points. Yes, the value remains weak, but positive dynamics are also observed. US business activity indices can be considered weak, so the British currency could get the support of market participants today. However, instead, the currency pair continues to trade in a narrow range all day and still does not show any desire to break out of the side channel. A separate topic that must definitely be covered in the review is Donald Trump's introduction of duties on the import of aluminum and steel from Brazil and Argentina. This was announced by the President of the United States through his favorite means of communication with the people - Twitter. Trump accused the governments of these countries of deliberately devaluing their monetary units, which harms American farmers. Thus, Brazil and Argentina join China and Turkey. Trump also again called on Jerome Powell to lower the key rate, as "so many countries have stopped using our strong dollar, while continuing to devalue their currencies." Despite the fact that many currency pairs showed steady growth against the US currency today, we can't say that it was caused precisely by Trump's decisions to introduce duties against two more countries. Trump had previously imposed duties on Turkish imports, on Chinese (and more than once), and the US dollar had never reacted in this way. Thus, today the US dollar immediately fell (against many currencies, but not against the British pound) for a number of reasons. The British currency ignored all messages from Trump, and information about a new skirmish between Jeremy Corbyn and Boris Johnson after the attack on the London Bridge. Thus, traders can only wait for this nightmare to end. The euro was freed from the shackles of a flat today. In theory, the pound should be freed from them until December 13, inclusive.

The technical picture of the pound/dollar pair formally speaks in favor of continuing a weak upward movement, but in fact it continues an open flat, which does not make much sense to reject. Yes, the pair is located above all the lines of the Ichimoku indicator, but at any moment it can turn down. There was no sense at all about the fundamental background now, as traders ignore any incoming information, both economic and political. If market participants immediately drew attention to all economic publications over the past month, the pound would have fallen by 200-300 points.

Trading recommendations:

GBP/USD resumed its upward movement as part of a sideways trend. However, traders are not recommended to consider the purchase of the pound sterling now, since quotes fail to go beyond the level of 1.2970. Selling the pair now is also impractical from a technical point of view, since the price is located above all the lines of the Ichimoku indicator.

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 2. Results of the day. Lagarde: ECB is considering launching a digital euro currency

4-hour timeframe

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Amplitude of the last 5 days (high-low): 28p - 19p - 33p - 20p - 47p.

Average volatility over the past 5 days: 29p (low).

The EUR/USD currency pair sharply grew for the first trading day of the new week. Although there were certain macroeconomic reasons for this, the growth of the European currency cannot be called expected. On the other hand, after a few weeks, the so-called paradoxical situation was finally resolved, which did not allow the currency pair to continue the downward trend or start the upward movement. Now, it seems that this situation has remained behind, volatility has already slightly increased, and traders can begin to return to the market, having felt the easing of pressure on the currency pair. We can immediately assume, just by taking a glance at the calendar of macroeconomic events for December 2, that the euro's growth is associated with the speech of ECB President Christine Lagarde. However, this is completely wrong. Firstly, Christine Lagarde began her speech just two hours ago, while the strengthening of the European currency began almost five hours ago. Secondly, during her speech, Lagarde only indirectly touched on the topic of monetary policy and did not report anything that could cause a serious growth of the European currency. But first things first.

The trading day began with the publication of business activity indices in the manufacturing sectors of Germany and the European Union. Despite the fact that these indicators remained below the critical level of 50.0 in November, both showed a slight increase. German - up to 44.1, European - up to 46.9. Although the gains were indeed small, theoretically, these publications could have such an effect on traders. Next, bypassing the ECB head's speech, the indices of business activity in the US manufacturing sector according to Markit and ISM were published. If the first index rose to 52.6, then the second, which is more significant, showed a decrease to 48.1, while the index of gradual acceleration of inflation from ISM, although it rose to 46.7 still turned out to be lower than the forecasted one. Thus, we can say that macroeconomic statistics from the United States turned out to be weak and did not meet the expectations of investors. And in sum, we have enough reason for traders to buy the European currency on Monday. We believe that the technical component also played a significant role in today's growth of the euro/dollar pair. The pair spent the entire previous week in an extremely narrow trading range, so it was clear to absolutely everyone that sooner or later the flat would end. The question was only when exactly this will happen. It happened today. The bulls got a chance since the bears did not receive the necessary grounds for continuing sales of the currency pair.

As for Lagarde's speech, as we have said, it did not concern the prospects of monetary policy. As it turned out, the ECB is in full swing exploring the possibility of launching an official digital euro. According to Lagarde, the creation of a "crypto-euro" can strengthen the position of the euro currency around the world, but also undermine the stability of the global financial system. Since at this stage it is necessary to very carefully weigh the pros and cons, to assess all the risks from this step, so far only discussions are taking place. "Our goal is to create an innovative, reliable and integrated new payment system in Europe. This will benefit everyone in the euro area and significantly strengthen the position of the euro in the world," Lagarde said at a hearing in the European Parliament.

We believe that a strong growth of the euro currency today is certainly good, but what will happen next? After all, the European currency still has no fundamental support. Yes, today's business activity indices slightly pleased traders, but they remained in a recession zone. In addition to these indices, other macroeconomic indicators remain at the stage of slowdown and deterioration. Inflation rose to 1.0%, but what is 1% if the ECB has been striving for 2.0% for several years now. Only 2.0% will allow us to consider such a step as a tightening of monetary policy. But what if Donald Trump imposes duties on European goods tomorrow? But what if on December 15 he imposes duties on Chinese goods worth another 160 billion euros? But what if the trade war between Beijing and Washington continues to escalate? After all, all this will first of all negatively affect the European Union, its economy and the euro currency. Thus, we believe that, despite today's growth, which has not yet been completed, the prospects for the euro remain extremely vague.

From a technical point of view, you need to wait until the situation settles down a bit. Strong growth is always replaced by calming the market, and all indicators will take some time to bounce back. Also, after the jerk is completed, a downward correction should follow, and by its strength, we can understand whether traders are configured to further purchase the pair or today there was a one-time impulse.

Trading recommendations:

The EUR/USD pair started an upward movement, and volatility sharply grew today. Thus, for those who are already in longs, it is recommended to take profits around the levels of 1.1091 and 1.1100. From our point of view, it's quite dangerous to open new purchases of the euro currency now, as the pair can go into correction. Further trading strategy can be discussed after the completion of the current upward spurt and correction after it.

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