Analysis of EUR / USD and GBP / USD for December 4. China is racing for new duties from Donald Trump

EUR / USD

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On December 3, the EUR/USD pair completed without a fundamental change in the exchange rate. Despite the fact that the current wave marking involves the completion of the construction of the downward correctional part of the trend and the construction of a new upward trend, there are still doubts before the successful attempt to break the maximum of wave b that markets will be able to bring this scenario to life. Nevertheless, it will be possible to speak more confidently about the prospects for the euro currency after the peak of wave b remains below. If the attempt to break through the peak of wave b is unsuccessful, then the instrument can proceed to construct a horizontal wave structure.

Fundamental component:

On Tuesday, the news background for the euro-dollar instrument was weak. There were a lot of news and economic reports on Monday, which caused quite strong purchases of the euro. However, on Tuesday, there are no news except Donald Trump's new threats to impose duties on the entire world, in particular the countries of Europe and China. It is the topic of the trade war with China that keeps many economists awake, as the next deterioration in relations between Beijing and Washington could lead to another decline in the growth rate of the world economy and, as a result, of each individual country. On Monday, Donald Trump warned China again that if the deal, at least in the first phase, is not signed until December 15, he will introduce a new 15% duty on Chinese goods totaling $ 160 billion. Now, what is the probability that Beijing will suddenly take and sign a trade agreement, which, according to many experts, is unprofitable for him for the remaining 11 days? I find it extremely low. Therefore, the markets will witness a new conflict between the PRC and the USA in a week and a half. The relations between which have been complicated recently due to the adoption by the Senate and the US Congress of laws on human rights and democracy in Hong Kong and the signing of these laws by Donald Trump.

General conclusions and recommendations:

The euro-dollar pair supposedly completed the downward trend. Thus, I now recommend to buy the instrument with targets located near the calculated level of 1.1176, which equates to 0.0% Fibonacci. However, I also recommend waiting for a successful attempt to break through the peak of wave b before this.

GBP / USD

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On December 3, the GBP/USD pair gained about 55 basis points, and presumably remains within the framework of constructing the proposed wave c, the three-wave correction section of the trend. If the current wave marking is correct, then wave c is nearing completion, and after that, we are waiting for the construction of three waves down, which in general, can be described as a horizontal section of the trend starting from October 21. If this is true, then the instrument will begin to decline with targets located near the level of 100.0% Fibonacci in the near future.

Fundamental component:

On Tuesday, the news background for the GBP / USD instrument was quite inadequate. If we omit all the news from Donald Trump, only the index of business activity in the construction sector came out in the UK, which turned out to be below 50. Despite the fact that business activity in all areas of Britain remains in very weak condition, the British pound continues to grow and performed successfully an attempt to break through the level of 127.2% Fibonacci. Today, the third index will be released from a series of business activity, and this time in the service sector which may also remain below 50, indicating the weakness of this sphere. Moreover, all this news and reports should trigger the sale of the pound, but it is still growing, which cannot be connected with the upcoming elections, which, according to the majority, will be won by conservatives, and analytical agencies predict that Boris Johnson will be able to form a "majority parliament." Thus, the probability of a soft Brexit is growing, and together with it, is the pound sterling.

General conclusions and recommendations:

The pound-dollar instrument continues to build the correctional part of the trend. Thus, now, I still expect the pair to decline to 1.2770 after the MACD signal "down". The breakdown of the Fibonacci level of 127.2% indirectly indicates the willingness of the markets to further increase quotations, but when making purchases of the instrument, I recommend that you use Stop Loss below the level of 127.2%.

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GBP/USD: plan for the European session on December 4. Pound buyers returned to the important resistance of 1.3010

To open long positions on GBPUSD, you need:

Look at the graph. The October upward trend was stopped in the resistance area of 1.3010, to which the buyers of the pound have gradually returned. Further growth will depend directly on the results of opinion polls and elections, which are only a short time away. The breakthrough of the maximum of 1.3010 will lead to the demolition of several stop orders of bears and a powerful upward momentum in the area of 1.3039 and 1.3074, where I recommend taking the profits. If weak fundamental data on the UK services sector are released today, the pressure on the pound will return, and only the formation of a false breakout in the support area of 1.2970 will be a signal to buy GBP/USD. I recommend opening long positions immediately for a rebound only after updating the minimum of 1.2939.

To open short positions on GBPUSD, you need:

Sellers are still hoping for a weak report on the services sector, which will lead to the formation of a false breakout in the resistance area of 1.3009 and a decrease in the pound under the support of 1.2970. Only a real consolidation below this minimum will increase the pressure on the pair, which will push the pair even lower to the area of 1.2939 and 1.2896, where I recommend taking the profits. If sellers fail to hold the level of 1.3009 after the data, it is best to return to short positions only after the highs of 1.3039 and 1.3074 are updated.

Indicator signals:

Moving Averages

Trading is just above the 30 and 50 moving averages, which keeps the probability of the pound rising in the short term.

Bollinger Bands

Breaking the upper limit of the indicator around 1.3009 will lead to a more powerful bullish impulse.

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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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Trading plan for EURUSD on 12/04/2019. Big news

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The issue of the Trump-China trade agreement is on hold. Trump has stated that December 15 is not the final deadline for a deal (as it was previously). Trump also said that he sees no problem for himself to act in international trade by imposing new duties against different countries.

On Wednesday, the focus is on important news in the US. At 14:15, the employment report for November from ADP will be released.

An important report on business activity in the ISM services sector will be released at 16:00.

In the case of weak US data, a new wave of dollar sales is possible.

If the data come out strong, a deep correction on EURUSD is possible - a decrease to 1.1035.

We keep purchases from 1.1035.

Possible purchases with reductions.

Sell at a break down of 1.0980.

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Technical analysis recommendations for EUR/USD and GBP/USD on December 4

Economic calendar (Universal time)

In today's economic calendar, you need to pay attention to the following events:

9:30 (UK) - data on indexes of business activity in the services sector;

13:15 (USA) - change in the number of people employed in the non-agricultural sector;

15:00 (USA) - Procurement Managers Index for the non-manufacturing sector;

15:30 (USA) - crude oil reserves.

EUR / USD

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The strength of the resistance that was met yesterday (area 1.1082 daily Kijun + weekly Fibo Kijun + upper border of the daily cloud) managed to delay the further development of players to the upside. As a result, there has been inhibition, which can lead to the formation of rebound. In this case, support can be 1.1055-61 (weekly Tenkan + daily Fibo Kijun) and 1.1030-37 (lower boundary of the daily cloud + daily Tenkan). Now, breaking through the encountered resistance (1.1082) and the liquidation of the daily cross (1.1102), as noted earlier, will open the way to the most significant resistance of this area at 1.1145 (monthly Tenkan + weekly Kijun).

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On the other hand, both key levels of low halves (1.1080 central pivot level + 1.1033 weekly long-term trend) are currently reinforced by important milestones from high halves (1.1082 congestion of levels of different halves + 1.1030 lower border of the daily cloud and daily short-term trend) Thanks to this, conditions are now in place that can rely on the strengthening of the bears when consolidating and staying at 1.1080 (central pivot level). Today, the main reference point in case of decline will be 1.1033 (weekly long-term trend). With the resumption of bullish activity, exit from the correction zone (maximum 1.1093) and the restoration of the upward trend, 1.1107 (R2) - 1.1121 (R3) can appear as resistance within the day.

GBP / USD

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At the same time, players on the upside tested the maximum extreme of October (1.3201) and are close to leaving the zone of long confrontation, which led to the sideways movement in November. The tasks to strengthen the bullish moods are now reduced to breaking through the resistance of the maximum extremum (1.3201) and fixing in the bullish zone relative to the weekly cloud, with subsequent advancement to the monthly medium-term trend (1.3167). In the case of a rebound from 1.3012, the accumulation of supports under the current conditions continues to remain in the zone of 1.2940 - 1.2880.

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Yesterday's rise allowed the classic pivot levels to expand the boundaries of bullish opportunities to 1.3025 (R1) - 1.3059 (R2) - 1.3107 (R3) today. However, there is a development of a downward correction in the lower halves at the moment, which most technical indicators have already set up to support. Today, key support for the development of the decline on H1 is located at 1.2977 (central pivot level) and 1.2932 (weekly long-term trend).

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

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EUR/USD: plan for the European session on December 4. The level of 1.1092 remains a problem for euro buyers

To open long positions on EURUSD, you need:

The lack of important fundamental statistics yesterday did not allow traders to continue the growth of EUR/USD in the afternoon. Already today, there are several important reports on the services sector of the eurozone countries, which can lead to a continuation of the upward trend formed at the beginning of this week. However, a new upward wave will be formed only after the breakout of the resistance of 1.1092, which will lead to an update of the highs in the area of 1.1109 and 1.1131, where I recommend taking the profits. In the scenario of EUR/USD decline in the first half of the day, it is best to open long positions after the formation of a false breakout in the support area of 1.1061 or buy immediately on the rebound from the minimum of 1.1035.

To open short positions on EURUSD, you need:

Like yesterday, the bears will rely on a failed break above resistance 1.1092 that will be the first signal for opening short positions in the euro the purpose of which will be the support of 1.1061, but more important will be a return to the support level of 1.1034, where I recommend taking the profit. It is in the area of 1.1034 Euro buyers will try to build the lower border of the new upward channel. In the scenario of EUR/USD growth above the resistance of 1.1091 in the first half of the day after good data on the services sector of the eurozone, which is generally in a fairly stable position, it is best to consider short positions after updating the maximum of 1.1109 or sell immediately on a rebound from the resistance of 1.1131.

Indicator signals:

Moving Averages

Trading is already in the area of 30 and 50 moving averages, and for the bulls not to miss the momentum, a breakout of the resistance of 1.092 is needed.

Bollinger Bands

The upper border of the indicator coincides with the resistance of 1.1092, while the breakdown of the lower border of the indicator in the area of 1.1070 may increase the pressure on the euro.

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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

Hot forecast for EUR/USD on 12/04/2019 and trading recommendation

At the moment, I must admit that macroeconomic statistics alone is clearly not enough to somehow revive the market. This is clearly seen in the reaction to data on producer prices in Europe, the decline of which increased from 1.2% to 1.9%. In fact, there was no reaction. However, this indicates that the recent increase in inflation in Europe is more likely temporary, and we will see its next slowdown in the near future. Thus, in addition to commonplace statistics, additional factors are also necessary, which is usually in the form of political events. But due to the fact that it was somehow boring yesterday in this regard, the single European currency, in fact, stood still.

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Therefore, we can safely assume that if there are no high-profile political statements or events today, the market will not particularly respond to ADP employment data. Nevertheless, they are still extremely interesting, especially when you consider that employment should increase by 140 thousand, against 125 thousand in the previous month. In addition, do not forget that these data precede the publication of the report of the Ministry of Labor, which will be held this Friday. And if employment forecasts are confirmed, then the Ministry of Labor will report on the improvement of the situation on the labor market. In other words, this is extremely significant data, but if there are no additional factors, the dollar will continue to stand still.

Employment Change from ADP (United States):

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In terms of technical analysis, we see a multi-day slowdown within the psychological 1.1000, which has gotten results. The control level, in turn, was developed by the quote, and the cluster gave acceleration. As a result of which, we saw an inertial upward movement up to the next level of 1.1080. After that, the upward movement began to decline, and a pullback / stagnation formed along the level of 1.1080.

In terms of a general review of the trading chart, we see that the recovery process, relatively elongated correction, which is at the development stage 66%, returned to the region of 30% and was punctured again.

It is likely to assume that the oscillation along the level of 1.1080 will remain for some time, where the boundaries of the oscillation are 1.1070 / 1.1090. A characteristic overbought is felt in the market, but it is better to work on the breakdown of conditional boundaries.

Concretizing all of the above into trading signals:

- Long positions are considered in case of price fixing higher than 1.1090 / 1.1100.

- Short positions are considered in case of price fixing lower than 1.1070, not a puncture shadow.

From the point of view of a comprehensive indicator analysis, we see that the indicators turned around and unanimously took the upside, due to the price increase. In the case of movement along the level of 1.1080, indicators on the minute and hour intervals can be multidirectional.

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Trader Morning Coffee 04/12_what you need to know

Good morning all,

Equity markets have suffered losses for the second day in a row both in the European and US markets. Selling pressure has increased in the equity market after Trump's comments about tariffs against French products (as a provocative response to the internet taxation) and,especially, hints that the US is no hurry to conclude the US-China trade deal (possibly postponing it after the 2020 elections).

While USD was weakening, UK FTSE was one of the biggest losers, sinking 1.8%. The US indices set off some of their early losses. They started the spot session with (more than 1% down). (all in line with our yesterday post).

As said, the US dollar lost ground against AUD and GBP. However, it is close to ST important levels. Today, it is showing some signs of recovery.

VIX jumped by almost 10%. NATGAS and CrudeOil continued their difficult recovery after Friday sell off. Also GOLD is showing some strength, but it is trading still below 1.500.

ECONOMICS DATA

  1. IT, FR, SP, GE, EU, UK Markit PMI 08.15 / 9.30 Gmt
  2. US ADP Employment change 13.15 Gmt
  3. US Markit PMI 14.45 Gmt
  4. US ISM NON MANUFACTURING 15.00 Gmt
  5. EIA Crude Oil stocks Change 15.30 Gmt

OVERNIGHT

  • Asian equity markets extended losses as global risk appetite remained sapped by the turbulent trade climate
  • Strong Chinese Caixin Services and Composite PMI numbers added to the country's recent flurry of strong activity data
  • Google founders Larry Page and Sergey Brin are stepping down as leaders of parent group Alphabet Inc.
  • The global banking sector has now cut more than 75,000 jobs this year, with the vast majority of them in Europe

Stay Safe

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Elliott wave analysis of GBP/JPY for December 4 - 2019

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GBP/JPY continues to move sideways in a narrow range between 140.87 - 141.74. We expect an ultimate break higher through resistance at 141.74 for a continuation of the uptrend towards 143.19 and 144.55.

In the short-term, a break above minor resistance at 141.25 will indicate that the pair is trying to break resistance near 141.74. If it comes true, the pair will inch up to 143.19 and above. If support at 140.87 is broken, back-up support is located just below at the level of 140.73.

R3: 142.14

R2: 141.69

R1: 141.58

Pivot: 141.25

S1: 140.87

S2: 140.73

S3: 140.73

Trading recommendation:

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

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Forecast for EUR/USD on December 4, 2019

EUR/USD

US President Donald Trump surpassed himself. After raising duties on metal from Argentina and Brazil, he announced his intention to introduce an additional 15% duty on Chinese goods worth $160 billion starting on December 15, saying that it is better to conclude a trade agreement after the presidential election. In addition, Trump announced his intention to introduce duties on goods from France to 100% worth $2.4 billion, which was the reason for the trial with Airbus - subsidizing the company. The European Commission replied that the EU would act in a consolidated manner against the United States. A widespread trade war erupts.

The US stock index S&P 500 lost 0.66% yesterday, gold rose 1.03%, and the yield on 5-year US government bonds fell from 1.64% to 1.54%. Correlations are completely crisis, but the dollar index lost 0.14%. It seems that yesterday there was a reflex growth of counter-dollar currencies on the news regarding China, without taking into account the whole political picture. Such a desynchronization cannot last long; we are waiting for correlations to recover today.

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On the daily chart, the price is stuck in the convergence of the lines, the Marlin oscillator is turning down. The probability of growth to the Fibonacci level of 110.0% (1.1155) remains, but it is already small.

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On the four-hour chart, the signal line of the Marlin oscillator is decreasing, but still in the growth zone. The price is above the lines of balance and MACD. The first signal for a fall will be the price drift below the MACD line, approximately at the level of 1.1038. By this time, Marlin will already be in the bears' zone. We are currently waiting for the development of events, it is too early to sell.

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Elliott wave analysis of EUR/JPY for December 4 - 2019

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The EUR/JPY pair once again failed to break resistance at 120.90 and we have seen a deeper correction to near the 61.8% corrective target of the rally from 119.62 to 120.92. This is more than enough to set the stage for the next impulsive rally higher through 120.90 towards 123.55 as the next major upside target.

In the short-term, a break above minor resistance at 120.48 will confirm the completion of blue wave (ii) and the developing of blue wave (iii) higher towards at least 122.24 or to 123.55. Only an unexpected break below 119.62 will invalidate our bullish count.

R3: 121.40

R2: 120.90

R1: 120.48

Pivot: 120.28

S1: 120.11

S2: 119.88

S3: 119.62

Trading recommendation:

Our stop at 120.25 was hit and we have booked a nice 300 pip profit. We will re-buy EUR at 120.11 or upon a break above 120.48 and place our stop at 119.55

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Forecast for GBP/USD on December 4, 2019

GBP/USD

The British pound reached the top target of 0.0% on the Fibonacci chart on the daily chart. At the same time, the Marlin oscillator moved into the growth zone and the target of 1.3145, the resistance of the price channel line, was open. Only one bearish factor remains - if the price nevertheless hypothetically forms the fourth peak, then the price will fall today. The aim of the decrease will be the correction level of 23.6%, to which the MACD line (blue indicator has already approached.

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On a four-hour chart, the price is waiting for new impulses at the Fibonacci level of 110.0%. An impulse down (a decline with consolidation at 100.0%) will send the price to the first bearish target of 1.2926 (Fibonacci level 76.4%). An impulsive rise will make it possible for the price to consolidate above 1.3012 with a view to further growth to 1.3145.

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Forecast for AUD/USD on December 4, 2019

AUD/USD

On the daily chart, the price broke above the balance indicator line yesterday, but did not consolidate above it and the current market trend returns to a decline. The signal line of the Marlin oscillator briefly exceeded the boundary with the growth territory, it is currently going back to the area below it. The immediate goal of the aussie is the MACD line at the price of 0.6798. Consolidation below it opens the target at 0.6716 - support of the embedded line of the price channel.

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On a four-hour chart, the price returns to the indicator lines on its scale. Price consolidation below the MACD line on the daily (0.6798) could be accompanied by the price touching the same indicator line on the H4 (0.6786).

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Technical analysis: Important intraday Level For EUR/USD, December 04,2019

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When the European market opens, some economic data such as German 10-y Bond Auction, Final Services PMI, German FinalServices PMI, French Final Services PMI, Italian Services PMI, and SpanishServices PMI will be published. The US is due to unveil Crude Oil Inventories, ISM Non-Manufacturing PMI, Final Services PMI, and ADPNon-Farm Employment Change.So, amid the reports, EUR/USD will move in a medium volatility during this day.TODAY'S TECHNICAL LEVEL: Breakout BUY Level: 1.1135. Strong Resistance: 1.1129. Original Resistance: 1.1118. Inner Sell Area: 1.1107.Target Inner Area: 1.1081. Inner Buy Area: 1.1055. Original Support: 1.1044. Strong Support: 1.1033. Breakout SELL Level: 1.1027. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important intraday Level for USD/JPY, December 04,2019

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Today, Japan will not release any economic data. The US is scheduled to publish Crude Oil Inventories,ISM Non-Manufacturing PMI, Final Services PMI, and ADP Non-Farm Employment Change reports. So, there is a probability that the USD/JPY pair will move with mediumvolatility during this day.TODAY'S TECHNICAL LEVEL: Resistance.3:109.10. Resistance. 2:108.88. Resistance. 1:108.67. Support. 1:108.41. Support. 2:108.20. Support. 3:107.98. (Disclaimer)

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EUR/JPY approaching support, potential bounce!

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Trading Recommendation

Entry: 120.0051

Reason for Entry: 100% Fibonacci extension, 76.4% Fibonacci retracement, horizontal overlap support

Take Profit : 120.6125

Reason for Take Profit: Horizontal overlap resistance, 61.8% Fibonacci retracement

Stop Loss: 119.6574

Reason for Stop loss::

horizontal swing low support, 76.4% fibonacci retracement

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AUD/USD approaching support, potential bounce!

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Trading Recommendation

Entry: 0.6831

Reason for Entry: 127% Fibonacci extension, 23.6% Fibonacci retracement, horizontal overlap support

Take Profit : 0.68615

Reason for Take Profit: horizontal overlap resistance

61.8% Fibonacci retracement

Stop Loss: 0.6886

Reason for Stop loss:

horizontal overlap resistance

76.4% Fibonacci retracement

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USD/JPY approaching support, potential bounce!

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Trading Recommendation

Entry: 107.898

Reason for Entry: 127% Fibonacci extension, 50% Fibonacci retracement, horizontal swing low support

Take Profit : 109.852

Reason for Take Profit: horizontal swing high resistance

100% Fibonacci extension

Stop Loss: 106.62

Reason for Stop loss:

horizontal swing low support

61.8% Fibonacci retracement

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Comprehensive analysis of movement options of #USDX vs EUR/USD vs GBP/USD vs USD/JPY for December 4

Minuette operational scale forks (H4)

The movement of instruments required a correction in the markup. Now, we are looking at the updated comprehensive analysis of #USDX, EUR/USD, GBP/USD and USD/JPY for December 04, 2019.

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US dollar index

From December 04, 2019, the development of the movement of the dollar index #USDX will be determined by the development and direction of the breakdown of the boundaries of the equilibrium zone (97.95 - 97.80 - 97.65) of the Minuette operational scale forks. The markup of the options for this movement is presented on the animated chart.

The breakdown of the lower boundary of ISL61.8 of the equilibrium zone of the Minuette operational scale forks (support level of 97.65) - will determine the continuation of the downward movement of #USDX to the boundaries of the 1/2 Median Line channel (97.42 - 97.20 - 97.00) of the Minuette operational scale forks.

On the contrary, the breakdown of the resistance level of 97.95 at the upper boundary of the ISL38.2 equilibrium zone of the Minuette operational scale forks is an option for the development of the movement of the dollar index to the boundaries of 1/2 Median Line Minuette channel (98.07 - 98.17 - 98.27).

The details of the #USDX movement are presented on the animated chart.

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Euro vs US dollar

Starting from December 4, 2019, the movement of the single European currency/US dollar (EUR/USD) will also be determined by the development and direction of the breakdown of the equilibrium zone (1.1090 - 1.1075 - 1.1055) of the Minuette operational scale forks. Details of the movement of the indicated levels are presented on the animated chart.

The breakdown of the upper boundary of ISL61.8 of the equilibrium zone of the Minuette operational scale forks (resistance level of 1.1090) will direct the movement of EUR / USD to the boundaries of the 1/2 Median Line channel (1.1101 - 1.1133 - 1.1166) of the Minuette operational scale forks.

Alternatively, the breakdown of the lower boundary ISL38.2 (support level of 1.1055) of the equilibrium zone of the Minuette operational scale forks together with the breakdown of the support level of 1.1050, will determine the development of the movement of the single European currency in the 1/2 Median Line Minuette channel (1.1050 - 1.1035 - 1.1022) with the prospect of reaching the SSL start line Minuette (1.1000) and updating the local minimum 1.0981.

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

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Great Britain pound vs US dollar

On the other hand, the development of Great Britain pound/US dollar (GBP/USD) currency movement from December 4, 2019 will depend on the development and direction of the breakdown of the range :

  • resistance level of 1.3012 - final Schiff Line of the Minuette operational scale forks;
  • support level of 1.2935 - the upper boundary of the 1/2 Median Line of the Minuette operational scale forks.

The breakdown of the final Schiff Line (resistance level of 1.3012) of the Minuette operational scale forks will make it possible for Her Majesty's currency to reach the boundaries of the equilibrium zone (1.3040 - 1.3075 - 1.3100) of the Minuette operational scale forks with the prospect of reaching the FSL Minuette final line (1.3205).

Meanwhile, the breakdown of the support level of 1.2975 will return the development of the GBP / USD movement to the 1/2 Median Line channel (1.2975 - 1.2955 - 1.2935) of the Minuette operational scale forks, and if the lower boundary of 1.2935 of this channel is broken, then the downward movement of this currency instrument can continue to the targets: control line LTL Minuette (1.2870) - minimums (1.2824 - 1.2759).

The details of the GBP / USD movement options are shown on the animated chart.

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US Dollar vs Japanese Yen

Similarly, the movement of the currency of the "land of the rising sun" USD / JPY from December 4, 2019 will be determined by the development and direction of the breakdown of the boundaries of the channel of the equilibrium zone (108.90 - 108.65 - 108.40)of the Minuette operational scale forks. We look at the options for working out these levels animated chart.

The breakdown of the lower boundary ISL61.8 (support level of 108.90) of the equilibrium zone of the Minuette operational scale forks, will lead to the continuation of the downward movement of USD / JPY to the local minimum of 108.26, and when it is updated, it will become possible to reach the price of the warning line tool LWL161.8 (108.05) of the Minuette operational scale forks and the end line of the FSL Minuette (107.60).

In contrast, the breakdown of the upper boundary of ISL38.2 (resistance level of 108.90) of the equilibrium zone of the Minuette operational scale forks with subsequent breakdown of the resistance level 108.95 will determine the development of the currency movement of the "land of the rising sun" in 1/2 Median Line Minuette channel (108.95 - 109.10 - 109.27) with the prospect of reaching the initial SSL line (109.45) and the lower boundary of the 1/2 Median Line channel (109.65) of the Minuette operational scale forks, after the breakdown of the upper boundary of 1/2 ML Minuette channel - 109.27.

We look at the details of the USD / JPY movement 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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GBP/USD: policy still keeps the pound in good shape

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The GBP/USD pair jumped to a six-week highs, testing the 1.30 mark.

According to experts, it will be possible to talk about the development of an upward trend in the British currency only if it consolidates above the level of $1.30, however, it has not been able to do this since October.

In anticipation of early parliamentary elections in the UK, the pound is more responsive to opinion polls and, to a lesser extent, the country's macroeconomic indicators.

According to the latest Kantar poll, voters' support for the Conservative Party grew by 1% to 44%. This helped the Tories to increase the gap between the Labour Party to 32%, and now it is 12% against 11% recorded in the previous week.

A Conservative victory by the markets is expected to reduce uncertainty around Brexit's future prospects, and this inspires the pound.

"Expectations for Conservatives to gain a majority in Parliament in a general election will mean that the pound will retain its recent gains," the MUFG believes.

"At this stage, we suspect that it is too late for the Labour Party, and the average number of polls that the Conservatives will receive is likely to support the pound this week," said MUFG analyst Fritz Louw.

"Nevertheless, the pound's growth potential is limited due to uncertainties around Brexit and recent economic data indicating a weakening British economy," he added.

According to the final data of IHS Markit, the index of business activity in the manufacturing sector of the UK fell to 48.9 points in November against 49.6 points recorded in October. Despite the fact that the value of the indicator was higher than the preliminary estimate (48.3 points), in general, the data are weak and suggest that activity in the country's manufacturing sector continues to decline.

"British manufacturers are reducing the number of jobs at the fastest pace since 2012. This is another indication that the global slowdown, along with the uncertainty surrounding Brexit, continues to adversely affect the manufacturing sector," IHS Markit said.

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Foreign exchange markets are becoming a battleground, while the race for monetary easing is not over

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The USD index slipped to two-week lows after the data released the day before showed that the US manufacturing sector contracted for the fourth consecutive month in November and construction costs in the country unexpectedly dropped, fueling fears that the world's largest economy could enter a recession.

However, the dollar began to fall even before the release of weak data. The starting point for this was US President Donald Trump's tweet. First, the head of the White House again levied duties on imports of steel and aluminum from Brazil and Argentina, citing excessive devaluation of their currencies to the detriment of American farmers. Secondly, Trump demanded that the Federal Reserve do something with the dollar, because it is overpriced.

"The Federal Reserve should act so that countries, of which there are many, no longer take advantage of our strong dollar by further devaluing their currencies. This makes it very hard for our manufacturers and farmers to fairly export their goods. Lower Rates & Loosen - Fed!", said the American leader.

According to some experts, the fact that Trump for the first time directly linked the introduction of tariffs with currency movements may indicate the beginning of a new phase in trade wars, where currency markets are already becoming a battleground.

Recent statements by the head of the White House have revived talk about a possible currency intervention against the greenback.

Capital Economics believes that the US president is likely to fail in his attempts to weaken the dollar.

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Speaking to European MPs on Monday, Christine Lagarde asked for time to study the aspects of her new work and the factors on the basis of which a decision should be made on changing monetary policy.

"The EUR/USD pair still has a slight potential of a reduction if the ECB keeps interest rates next week, but hints at a weakening monetary policy in the future," Wells Fargo said.

However, there is another point of view.

"If US macro statistics continue to disappoint, next year we can see another Fed rate cut. The regulator may also need additional monetary incentives - as a result, competitors of the greenback will grow," Cambridge Global Payments strategists believe.

This year, the US central bank reduced interest rates three times and at its last meeting made it clear that in the future, it will make decisions depending on the incoming data.

The euro could strengthen against the US dollar in 2020, since the Fed has more opportunities than the ECB to act in the field of monetary policy, Commerzbank economists said.

"The Fed is more likely than the ECB to introduce additional stimulus measures in 2020 in response to weaker US economic growth. That is, the Fed can do more damage to the dollar than the ECB to the euro, because it has more opportunities to weaken the policy," they said.

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Euro: growth did not last long, the fall is already looming

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The European currency feels uncertain at the beginning of this week. In the EUR/USD pair, the euro is always the one being driven, giving the dollar the reins. Nevertheless, analysts believe that the euro will be able to recover in the medium term.

The political situation in Germany is rendering the European currency a disservice, experts say. The euro is doomed to failure if the current government resigns. The first bell was the defeat of Olaf Scholz and Klara Geyvits, candidates for leaders of the Social Democratic Party of Germany (SPD). Analysts fear that a change of leadership in one of the largest parties in Germany will lead to the collapse of the ruling coalition. This, in turn, will have an extremely negative impact on the euro, experts say.

Weak data on the manufacturing sector of the eurozone added fuel to the fire. On the one hand, many economic indicators increased, but business activity in almost all countries was very low. These factors also negatively affect the dynamics of the European currency. Pressure is also exerted on the signing of the Hong Kong bill by US President Donald Trump. Such a decision gave odds to the US currency, and the euro again had to defend its position, trying not to plunge to the bottom.

The EUR/USD pair was trading near the levels of 1.1020–1.1021 on Monday, December 2. Subsequently, after exceeding the 1.1030 mark, a reversal in favor of the greenback was recorded.

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Demand for the European currency remained extremely low at the beginning of the week, while it was high for the greenback. According to experts, in the event of a breakout of the resistance line of 1.1050, the EUR/USD pair may reach the level of 1.1100. At the moment, such a scenario is quite relevant, analysts believe, focusing attention on the upward movement of the pair.

The EUR/USD pair started on a positive note by rising to 1.1077 on Tuesday morning, December 3. The confident rise of the pair inspired market participants.

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Currently, the EUR/USD pair is trading within the range of 1.1081–1.1082, showing vigorous attempts to overcome the current range.

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Analysts are not disillusioned regarding the short-term and medium-term prospects for the euro, but the overall picture is moderately positive. They do not expect a 180-degree turn for the European currency in the near future, although changes in the German government can have an extremely negative impact on its dynamics. However, experts are counting on the stabilization of the euro, who is actively fighting for a place under the financial sun, which is most noticeable in the EUR/USD pair.

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Australian dollar is back on the line

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The new week was saturated for the Australian dollar: experts ranked it among the favorites of the market. The aussie is again showing an upward trend, not intending to give up its positions.

The Australian dollar set a positive tone in the financial market on Monday, December 2, by gaining 1% against the US currency and updating its two-week high. However, analysts are alarmed by weak data on the Australian economy, and therefore the possibility of a rally of the national currency is in doubt.

According to current reports, activity in the country's manufacturing sector has significantly slowed in the past month, inflation has dropped sharply, as has employment. Experts have recorded a slowdown in the Australian economy.

The aussie's current growth contributed to the improvement of economic data for China. Despite tensions amid a long trade conflict between the US and China, manufacturing activity in Australia has grown at a record pace over the past three years. According to current reports, this indicator is still up to par.

Another factor in strengthening the Australian currency was the decision of the Reserve Bank of Australia (RBA) to keep the interest rate at the current level. This conclusion was made by central bank chief Philip Lowe, having analyzed the current economic situation. He drew attention to a slowdown in employment growth and easing inflationary pressures. Currently, the RBA does not see the need for easing monetary policy, although a month ago the regulator considered this option.

The rise of the AUD/USD pair was also facilitated by criticism of US President Donald Trump about the strengthening of the US dollar and his appeal to the Federal Reserve to lower rates. Thanks to a number of positive factors, the pair managed to overcome the 0.6840 mark. On the morning of Tuesday, December 3, the AUD/USD pair was trading in the range of 0.6845–0.6846, demonstrating upbeat moods.

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Subsequently, the pair reached the level of 0.6860, trying to go beyond this range. Currently, the AUD/USD pair runs within this framework, trying to expand them.

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At present, the Australian currency feels confident, but such a global factor as a hitch in the US and China trade negotiations can interrupt its flight. In the event of a disagreement between Washington and Beijing, the Australian currency will fall, plunging to the bottom. Negotiations between the two powers significantly affect its dynamics, since Australia is the main supplier of raw materials to China. However, experts expect a continuation of the upward trend of the aussie in the short term.

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GBP/USD. December 3. Results of the day. Trump: I'm a major Brexit fan. Before the election, the Tories walk along the blade

4-hour timeframe

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Amplitude of the last 5 days (high-low): 69p - 89p - 52p - 63p - 53p.

Average volatility over the past 5 days: 65p (average).

The GBP/USD currency pair followed the example of the European currency today and made an impressive jump, reaching a psychological mark of 1.3000. It seems that after a lull for a month and a half, traders began to return to the market. However, the time has not yet come for such conclusions. First, market participants continue to ignore any macroeconomic statistics from the United States and the United Kingdom. Secondly, the resistance area of 1.2970–1.3010, from which the pair has bounced several times in the last two months, has not been overcome, which means there may be another rebound from it. Thirdly, it is not clear why a tangible upward movement began today?

An index of business activity in the UK construction sector was released today, which showed a slight improvement (45.3 against 44.2 a month earlier). However, as in the case of business activity in the industrial sector, the construction industry is still experiencing a decline, so the "improvement" is quite formal. There were no more macroeconomic publications today, and we believe that the rise of the pound is completely unrelated to the publication of the business activity index.

But, of course, this takeoff may be connected with the arrival of Donald Trump to London, who manages to "light up" absolutely everywhere, comment on absolutely all the events in the world, ignite several trade wars, criticize Jerome Powell and the Federal Reserve while also supporting "his friend" Boris Johnson . It was the support of Johnson and Brexit that Trump took on his arrival in London. "Boris Johnson is very capable, and I think that he will do an excellent job," Trump said and expressed confidence that it was Johnson's party who would win a landslide election. But French President Emanuel Macron fell under a flurry of criticism: "France needs NATO more than other countries, and the United States needs this alliance the least. A very dangerous statement from France. And it's very strange - they've got everything wrong with the economy, and for some reason they have such phrases about NATO," Trump said in response to Macron's words about " NATO's dead brain." Thus, the pound could react to Trump's support of Johnson in the election. Or the rising ratings of the Conservative party...

According to recent studies, the advantage of Conservatives over Labour has increased to 12%. Again, we would like to note that any opinion polls always have an error, and the opinion of the UK population may change. It is not at all surprising that the Conservatives took the lead even more after Johnson criticized the Labour Party for the law it adopted in 2003, which gives criminals convicted of terrorist activity the right to early release. According to Johnson, it was this law that caused the tragedy on the London Bridge. The prime minister did not cover the fact that the murdered terrorist is not the only terrorist in the world. There is also the fact that this law could be repealed under the ruling Conservative Party even before the tragedy. The Labour Party was put in a disadvantageous light, which affected their political ranking. However, hopes that Johnson's party will not succeed in forming a ruling majority still remains. According to many experts, if the advantage of Conservatives drops to 7%, then the Tories will not be able to take the majority of seats in Parliament. In this case, it will be necessary to consider how many votes the Conservatives + deputies of the Brexit party and the Labour Party + Scots + Social Democrats will collect. Such coalitions could be formed to continue the Brexit war in the new Parliament. Thus, Tory's advantage remains, but it is very shaky, and Trump's visit to London can be used by Labour to cast a shadow over Conservatives, whose leader does not hide his friendship with the American president, who is not very loved in the UK.

Well, the prospects for the pound, for the reasons that we covered in the morning article, remain extremely vague. There are a sufficient number of reasons for this and all are connected with Brexit and with the UK's life after Brexit. From a technical point of view, the pound/dollar pair has overcome the resistance level of 1.2976 and can now continue to move up, but we believe that correction will begin tomorrow, and the pair will not be able to overcome the area of 1.2970 - 1.3001.

Trading recommendations:

GBP/USD continues to move upward as part of a sideways trend. However, it is not advised to buy the pound at the moment, since quotes have not yet been able to leave the area above 1.2970 - 1.3010. If the bulls still manage to break higher, then it will be possible to consider buying the pound/dollar pair while aiming for 1.3025 and 1.3052. Selling the pair is now impractical, from the point of view of technical analysis, 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