USD is declining in anticipation of the employment report, CAD and JPY are trading neutrally, but keep chances of growth

The US dollar remains under pressure, declining for the fifth day in a row. Thus, there has been an ambiguous silence around trade negotiations over the past 24 hours. On the other hand, Trump is "maintaining confidence," while China insists that all inflated tariffs should roll back to their previous levels.

At the same time, non-farm growth for November is expected to increase by 185 thousand, which looks suspicious after a very weak ADP report and a higher growth in unemployment applications. Therefore, trading will go in a narrow range before the publication of data, and after the publication, any surprises are possible.

USD/CAD

The decision of the Bank of Canada to leave the rate at 1.75% was perceived by the markets as neutral, since it coincided with forecasts. In addition, some strengthening of the loonie in the last two days is most likely due to other factors - a general decline in the dollar amid weak ISMs and oil growth.

Meanwhile, BoC focuses on key parameters of the state of the economy, such as inflation, unemployment and GDP. In all three parameters, the dynamics is neutral, current levels look stable, and government bond yields have recovered to a 6-month high again after a strong decline in August-September.

But in order to see that this stability rests on an extremely shaky foundation, it is enough to look at two graphs. The first of them reflects the level of household savings, the second - borrowing. Now, it is clear that is impossible to ensure the growth of consumption without the growth of real incomes of citizens.

analytics5de9f3d7ce9e1.jpg

Nevertheless, expectations for the loonies look neutral positive in the medium term. Consolidation below 1.3186 is unstable, but gives a chance for further decline to 1.3114. If today's data on US employment are above expectations, USD/CAD may rise to the area of 1.3196 / 3270 and go into the sideways range, otherwise, a decrease is more likely.

USD/JPY

On Thursday, Japanese Prime Minister Abe announced additional financial incentives worth 13.2 trillion yen (121 dollars or about 2% of GDP for 15 months). The markets focusing on the traditional cycle of demand for risk obviously missed this step, and the yen practically did not react. However, this step of the government can signal much more serious factors than the market sees.

Moreover, Japan faces a serious fall in consumer demand. Sales of vehicles in November declined by 14.6%, which decline was 26.4% a month earlier, and now, this figure is at its lowest since 2011.

In October, household spending fell sharply, which is perhaps a reaction to an increase in sales tax. Average wage growth, in turn, is also below forecasts.

analytics5de9f3f1a4066.jpg

On December 11, the Bank of Japan will publish the quarterly Tankan index. According to forecasts of Mizuho Bank, we should expect a decline in the index primarily in the service sector. At the same time, it is highly likely that the Japanese economy will look weaker than the market currently expects given that the production Tankan is already in negative territory. Mizuho notes that the intention of large enterprises to increase investment in fixed assets, which they expressed in the September survey, is likely to be revised, and will show not an increase, but a decrease in investment in December.

Japanese financial authorities are preparing to resume support for the economy. The probability of expanding the stimulus package by the Bank of Japan is growing, the CFTC report on Friday showed a decrease in the speculative position on the yen. Thus, many signs indicate that attempts will be made to prevent the strengthening of the yen amid a weakening dollar and lower demand for risk.

As a result, reducing the probability of a US-China trade deal is depriving USD/JPY of having a chance to go up from the range of 108.25 / 109.72. Nevertheless, any positive news will push the yen up, as the expectations of the market will coincide with the plans of the financial authorities of Japan.

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

Indicator analysis: Daily review on December 6, 2019, on EUR / USD currency pair

Trend analysis (Fig. 1).

On Friday, according to the forecast (down), the first lower target is a retracement level of 23.6% which is equivalent to 1.1085 presented in a blue dotted line. If this level is reached, we can expect upper work with the upper target of 1.1117, the upper fractal In a blue dashed line. If the news comes out upper, which is bad for the dollar, then the upper work with the first goal 1.1117 is the upper fractal in a blue dashed line.

analytics5de9e9bae1b1d.png

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:

Today, an upward movement is possible and the news hits at 13.30 Universal time.

On Friday, according to the forecast, the first lower target is a retracement level of 23.6% which is equivalent to 1.1085 presented in a blue dotted line. If this level is reached, we can expect upper work with the upper target of 1.1117 which is the upper fractal in a blue dashed line. If the news comes out upper, which is bad for the dollar, then the upper work with the first goal 1.1117 is the upper fractal in a blue dashed line.

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

Trading plan for EUR / USD on December 6, 2019

analytics5de9f2f370c38.jpg

The growth of the EUR / USD rate in December was caused by the weak data on the US economy, a possible reduction in the fed rate.

Sellers attempted to push the Euro down from the 1.1100 level but buyers returned it to this level.

Today, it is important to track the impact of the US employment report on the dynamics of EUR / USD pair - and what will be the closing today and this week.

The employment report will be released at 14:30 London time with an expected significant decline in the number of new jobs below 100K. This may cause a new wave of growth in the Euro.

Keep purchases from 1.1035, stop at 1.0990.

Possible purchases are with kickbacks.

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

Indicator analysis: Daily review on December 6, 2019, on GBP / USD currency pair

Trend analysis (Fig. 1).

On Friday, with the news headlines, the price can continue to move up with the target at 1.3311, the resistance line in black bold line and upon reaching this level, start a retreat downward with the first target 1.3116 the pullback level of 14.6% presented in a red dashed line.

On Friday, the price may work down with the target of 1.3310 a pullback level of 14.6% presented in a blue dotted line, and then a continuation of the upper movement.

analytics5de9f1d6643ca.png

Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion: upward movement.

On Friday, the price can continue to move up with the target at 1.3311 the resistance line in a black bold line and, upon reaching this level, start a retreat downward with the first target 1.3116 which is a pullback level of 14.6% presented in a red dashed line.

On Friday, the price may work down with the target of 1.3310 which is a pullback level of 14.6% presented in a blue dotted line. And then after, the continuation of the upper movement.

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

Elliott wave analysis of GBP/JPY for December 6

analytics5de9ec7778e7a.png

GBP/JPY continues to rally after having tested resistance at 143.19. Minor sideways correction may advance to 144.55 - the ideal target for red wave v and black wave iii. Short-term support is seen at 142.77 and at 142.44 with key-support at 141.70.

R3: 144.55

R2: 143.87

R3: 143.28

Pivot: 142.77

S1: 142.44

S2: 142.16

S3: 141.70

Trading recommendation:

We are long GBP from 140.12 with our stop placed at 141.55. We will take profit at 144.45

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

Elliott wave analysis of EUR/JPY for December 6 - 2019

analytics5de9eb3e25a53.png

EUR/JPY is still trying to break resistance at 121.02. It should be a matter of time before this resistance is overcome and the pair will move higher to 122.24 and 123.55. In the short-term, a minor corrective dip to 120.51 seems likely before the next attempt to break above resistance at 121.02 is in the cards. Even a short-term break below 120.51 does not change our overall bullish outlook. Only a break below 120.09 will question the uptrend.

R3: 121.90

R2: 121.48

R1: 120.90

Pivot: 120.51

S1: 120.24

S2: 120.09

S3: 119.88

Trading recommendation:

WE are long EUR from 120.11 with our stop placed at 120.00

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

Trading plan for EURUSD for December 06, 2019

analytics5de9e5ff452a0.jpg

Technical outlook:

EURUSD might have print an interim high at 1.1116, which could hold for at least a few trading sessions. We are expecting at least a retracement from current levels towards 1.1030, before finding support to resume rally. As discussed yesterday, probability also remains for a dip below 1.0981 levels to complete a complex corrective drop that began from 1.1180 levels earlier. In either case, expect a brief correction from current levels before the medium term bullish trend could resume. The larger wave which is being worked upon is between 1.0879 and 1.1181 levels respectively and until prices stay above 1.0879, the structure remains in favor of bulls. Immediate price support is also seen at 1.0940 along with Fibonacci 0.786 retracement of previous rally. A drop towards 1.0940 cannot be ruled out, and if prices manage to reach there, a sharp bullish reversal can be expected.

Trading plan:

Remain long and add further around 1.0940 levels, stop at 1.0879, target is 1.1500

Good luck!

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

EUR/USD testing resistance, potential drop!

analytics5de9e6a66744d.png

Trading Recommendation

Entry: 1.11388

Reason for Entry: 100% Fibonacci extension, 78.6% Fibonacci retracement, horizontal swing high resistance

Take Profit : 1.10815

Reason for Take Profit: 38.2% Fibonacci retracement

Stop Loss: 1.11797

Reason for Stop loss:

horizontal swing high resistance

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

USD/CAD Bounce in progress!

analytics5de9e5eb5f7f7.png

Trading Recommendation

Entry: 1.31510

Reason for Entry: 61.8% Fibonacci retracement

Take Profit : 1.32160

Reason for Take Profit:

23.60% Fibonacci retracement

Stop Loss: 1.31020

Reason for Stop loss:

76.4% Fibonacci retracement

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

USD/CHF approaching support, potential bounce!

analytics5de9e561a1fe6.png

Trading Recommendation

Entry: 0.9850

Reason for Entry: 161% Fibonacci extension, horizontal swing low support

Take Profit : 0.9926

Reason for Take Profit: horizontal pullback resistance

38.2% Fibonacci retracement

Stop Loss: 0.9800

Reason for Stop loss:

horizontal swing low support

61.8% Fibonacci retracement

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

Forecast for EUR/USD on December 6, 2019

EUR/USD

The euro grew by 25 points on Thursday, probably on the potential set on Wednesday by weak US data on ISM Non-Manufacturing PMI and employment from ADP in the private sector. But yesterday there was already good data: the US trade balance in October improved from -51.1 billion dollars to -47.2 billion, the volume of factory orders in the same month increased by the expected 0.3%. But most importantly, the Ministry of Labor weekly report on the number of applications for unemployment benefits showed 203 thousand applications against a forecast of 215 thousand, which can speak of fairly good data on today's Non-Farm Employment Change - new jobs in the non-agricultural sector. The forecast for the indicator is 181 thousand, it will likely turn out to be no worse. The University of Michigan consumer confidence index is expected to rise from 96.8 to 97.0; consumer lending in October could show growth from $9.5 billion to $16.0 billion.

analytics5de9ed14db8bf.png

On the technical side, a positive economic performance may mean that the 1.1155 target may not be achieved, the price exit with consolidation above the price channel line on the daily chart could turn out to be false, especially in the context of yesterday's positive data.

analytics5de9ed2a50b5b.png

On the four-hour chart, the divergence on the Marlin Oscillator remains relevant, the signal line continues to decline against rising prices, today the euro can fall. We do not expect a strong price movement - there is strong support from below: on the daily scale, the point of intersection of the price channel line with the Fibonacci level is 123.6% at the price of 1.1075, the MACD line is approximately in the same area at the four-hour chart.

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

Technical analysis: Important intraday Level For EUR/USD, December 06,2019

analytics5de9b8d886e41.jpg

When the European market opens, such economic data as Italian Retail Sales m/m, French Trade Balance, and German Industrial Production m/m will be unveiled. Consumer Credit m/m, Prelim UoM Inflation Expectations, Final Wholesale Inventories m/m, Prelim UoM Consumer Sentiment, Unemployment Rate, Non-Farm Employment Change, and Average Hourly Earnings m/m from the US are due. So, amid the reports, EUR/USD will move in a medium to high volatility during this day.TODAY'S TECHNICAL LEVEL: Breakout BUY Level: 1.1158. Strong Resistance: 1.1152. Original Resistance: 1.1141. Inner Sell Area: 1.1130. Target Inner Area: 1.1104. Inner Buy Area: 1.1078.Original Support: 1.1067. Strong Support: 1.1056. Breakout SELL Level: 1.1050. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important intraday Level for USD/JPY, December 06,2019

analytics5de9b868b7566.jpg

Japan will release such economic data as the Leading Indicators, Household Spending y/y, and Average Cash Earnings y/y. The US will unveil such economic data as Consumer Credit m/m, Prelim UoM Inflation Expectations, Final Wholesale Inventories m/m, Prelim UoM Consumer Sentiment, Unemployment Rate, Non-Farm Employment Change, and Average Hourly Earnings m/m. So, there is a probability that the USD/JPY pair will move with medium to high volatility during this day.TODAY'S TECHNICAL LEVEL: Resistance.3:109.30. Resistance. 2:109.08. Resistance. 1:108.87. Support. 1:108.61. Support. 2:108.40. Support. 3:108.18. (Disclaimer)

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

Forecast for GBP/USD on December 6, 2019

GBP/USD

The British pound reached the upper limit of the price channel yesterday, lasting since July 2014 (1.3147), today the price has exceeded this boundary and the price channel has lost its value. But the next goal - the Fibonacci level of 200.0% at the price of 1.3206, remains, and overcoming the level opens the second target at 223.6% at the price of 1.3352.

analytics5de9e6b71b4b9.png

The indicators on the four-hour chart warn that the second target may be unattainable - the signal line of the Marlin oscillator went down from its own channel. Further price growth to the first target of 1.3206 will form a divergence on the oscillator and this will already be a full-fledged reversal pattern.

analytics5de9e74610c5f.png

So, in the main scenario, we are expecting growth to 1.3206 and a pound reversal down to the nearest target of 1.2970 - Fibonacci level of 161.8% (daily).

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

Forecast for AUD/USD on December 6, 2019

AUD/USD

Australia showed weak economic indicators yesterday: the trade balance for October reached $4.50 billion against $6.49 billion in September, and revised down from 7.18 billion, while retail sales in October showed a zero increase against the expected 0.3%. The Australian dollar lost 17 points against a general decline of the US currency by 0.23%.

analytics5de9e52569558.png

On the daily chart, the price returned below the balance line, the Marlin oscillator in a neutral position on the boundary with the decline territory.

analytics5de9e53a42e3d.png

Marlin is also in a neutral position on the four-hour chart. The US employment data can move the market today, but it is expected to be good: the forecast for new jobs in the non-agricultural sector is 181 thousand, the University of Michigan consumer confidence index is expected to grow from 96.8 to 97.0, and consumer lending in October may show an increase from $9.5 billion to $16.0 billion

We are waiting for the Australian dollar to fall to the MACD line on the daily and four-hour charts, coinciding at the same level of 0.6800. Consolidating the price below the level opens a deeper target 0.6708 on supporting the price channel line.

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

Comprehensive analysis of movement options of #USDX vs EUR/USD vs GBP/USD vs USD/JPY (DAILY) for December 6

Here's a comprehensive analysis of the movement options for the main currency instruments - #USDX , EUR/USD, GBP/USD and USD/JPY - DAILY for December 6, 2019.

Minor operational scale (Daily time frame)

____________________

US dollar Index

Starting from December 6, 2019, the development of the movement of the dollar index #USDX will depend on the development and direction of the breakdown range :

  • resistance level of 97.50 - the upper boundary of the ISL38.2 equilibrium zone of the Minor operational scale forks;
  • support level of 97.30 - the ultimate Schiff Line Minor.

The breakdown of the final Schiff Line Minor - support level of 97.30 - will lead to the continuation of the downward movement of the dollar index to the targets: local minimum 97.10 - 1/2 Median Line Minor (96.90) - lower boundary of the ISL61.8 (96.25) equilibrium zone of the Minor operational scale forks - minimums (95.84 - 95.03).

On the contrary, when the upper boundary of ISL38.2 (resistance level of 97.50) is broken, the equilibrium zone of the Minor operational scale forks will develop the movement #USDX to the boundaries of 1/2 Median Line channel Minor (98.40 - 98.75 - 99.10) and equilibrium zones (99.35 - 99.75 - 100.20) of the Minuette operational scale forks.

The markup of #USDX movement options from December 6, 2019 is shown on the animated chart.

analytics5de92220997ca.jpg

___________________

Euro vs US dollar

From December 6, 2019, the development of the movement of the single European currency EUR/USD will be determined by the development and direction of the breakdown of the boundaries of 1/2 Median Line channel (1.1090 - 1.1125 - 1.1165) of the Minuette operational scale forks. The details of the movement is presented on the animated chart.

The breakdown of the upper boundary of the 1/2 Median Line channel Minuette (resistance level of 1.1165) is a continuation of the upward movement of EUR / USD to the equilibrium zones (1.1185 - 1.1250 - 1.1305) of the Minuette operational scale forks.

On the other hand, the return of the single European currency below the support level of 1.1090 on the lower boundary of the 1/2 Median Line channel of the Minuette operational scale forks will determine the continuation of the downward movement of this currency instrument to the goals: the initial SSL Minuette line (1.1035) - LTL Minuette control line (1.1000) - minimums (1.0981 - 1.0879).

The details of the EUR / USD movement options from December 6, 2019 are shown on the animated chart.

analytics5de922053648c.jpg

____________________

Great Britain pound vs US dollar

Development and direction of the breakdown range:

  • resistance level of 1.3140 - the upper boundary of ISL61.8 equilibrium zone of the Minor operational scale forks;
  • support level of 1.3045 - warning line UWL38.2 forks equilibrium zone of the Minuette operational scale forks.

will begin to determine the development trend of Her Majesty's GBP/USD currency movement from December 6, 2019.

A consecutive breakdown of resistance levels :

- 1.3140 - the upper boundary of the ISL61.8 equilibrium zone of the Minor operational scale forks;

- 1.1.3185 - warning line UWL61.8 of the Minuette operational scale forks;

will make it possible to continue the development of the upward movement of Her Majesty's currency to the local maximum 1.3379 and the warning line UWL100.0 (1.3410) fof the Minuette operational scale forks.

In case of breakdown of the warning line UWL38.2 (support level of 1.3045) of the Minuette operational scale forks, the development of the GBP / USD movement can be continued towards the goals: the 1/2 Median Line Minor (1.2950) - the control line UTL Minuette (1.2920) - the initial line SSL Minuette (1.2780) - the lower boundary of the ISL38.2 (1.2750) equilibrium zone of the Minor operational scale forks with the prospect of reaching the upper boundary of the 1/2 Median Line Minuette channel (1.2495).

The details of the GBP / USD movement from December 6, 2019 can be seen on the animated chart.

analytics5de921e2ee2c9.jpg

____________________

US dollar vs Japanese yen

Similarly, the development of the currency movement of the "country of the rising sun" USD / JPY from December 6, 2019 will also depend on the direction of the breakdown of the range :

  • resistance level of 109.10 (the boundary of the red zone of the Minuette operational scale forks);
  • support level of 108.60 (reaction line RL23.6 of the Minuette operational scale forks).

The breakdown of the reaction line RL23.6 (support level of 108.60)of the Minuette operational scale forks - continuation of the downward movement of USD / JPY to the targets: lower boundary of the ISL38.2 (108.30) equilibrium zone of the Minor operational scale forks - 1/2 Median Line channel (107.85 - 107.30 - 106.70) pof the Minuette operational scale forks.

Successive breakdown of resistance levels :

- 109.10 - red border of the of the Minuette operational scale forks;

- 109.35 - the 1/2 Median Line Minor;

- 109.50 - start line SSL Minuette;

- 109.77- control line UTL Minuette;

will determine the continuation of the development of the upward movement of the currency of the "land of the rising sun" to the upper boundary of ISL 61.8 (110.35) of the equilibrium zone of the Minor operational scale forks with the prospect of reaching a maximum of 112.42.

We look at the details of the USD / JPY movement on the animated chart.

analytics5de921ba1792b.jpg

____________________

The review was compiled without taking into account the news background. Thus, the opening of trading sessions of major 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.

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

Fractal analysis for major currency pairs on December 6

Forecast for December 6:

Analytical review of currency pairs on the scale of H1:

analytics5de9b07653864.png

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, we are following the development of the upward cycle of November 29. We expect a short-term upward movement, as well as consolidation in the range of 1.1096 - 1.1114. The breakdown of the level of 1.1114 will lead to a movement up to 1.1130. Price consolidation is near this level. For the potential value for the top, we consider the level of 1.1170. The movement to which is expected after the breakdown of the level of 1.1130.

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: 1.1114 Take profit: 1.1130

Buy: 1.1132 Take profit: 1.1170

Sell: 1.1065 Take profit: 1.1050

Sell: 1.1046 Take profit: 1.1026

analytics5de9b09c712cc.png

For the pound / dollar pair, the key levels on the H1 scale are: 1.3249, 1.3205, 1.3150, 1.3102, 1.3075 and 1.3025. Here, we are following the development of the upward cycle of November 27. The continuation of the movement to the top is expected after the breakdown of the level of 1.3150. In this case, the target is 1.3205. Price consolidation is near this level. For the potential value for the top, we consider the level of 1.3249. 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 1.3102 - 1.3075. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3025. This level is a key support for the top.

The main trend is the upward cycle of November 27

Trading recommendations:

Buy: 1.3150 Take profit: 1.3205

Buy: 1.3207 Take profit: 1.3247

Sell: 1.3102 Take profit: 1.3076

Sell: 1.3073 Take profit: 1.3027

analytics5de9b0b9e1e37.png

For the dollar / franc pair, the key levels on the H1 scale are: 0.9965, 0.9935, 0.9908, 0.9864, 0.9820, 0.9789 and 0.9745. Here, we are following the development of the downward structure of November 29. The continuation of movement to the bottom is expected after the breakdown of the level of 0.9864. In this case, the target is 0.9820. Short-term downward movement, as well as consolidation is in the range of 0.9820 - 0.9789. The breakdown of the level of 0.9789 should be accompanied by a pronounced upward movement. In this case, the potential target is 0.9745. We expect a rollback to correction from this level.

Short-term upward movement is possibly in the range of 0.9908 - 0.9935. The breakdown of the latter value will lead to in-depth movement. Here, the target is 0.9965. This level is a 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 : 0.9908 Take profit: 0.9933

Buy : 0.9937 Take profit: 0.9965

Sell: 0.9862 Take profit: 0.9825

Sell: 0.9820 Take profit: 0.9790

analytics5de9b0d7996a5.png

For the dollar / yen pair, the key levels on the scale are : 109.31, 109.06, 108.85, 108.58, 108.31, 108.10, 107.80 and 107.62. Here, we are following the formation of the descending structure of December 2. The continuation of the movement to the bottom is expected after the breakdown of the level of 108.58. In this case, the first goal is 108.31. Short-term movement to the bottom is possibly in the range 108.31 - 108.10. The breakdown of the last value will lead to a pronounced movement. Here, the goal is 107.80. For the potential value for the bottom, we consider the level of 107.62. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is expected in the range 108.58 - 109.06. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 109.31. This level is a key support for the downward structure.

The main trend: the formation of initial conditions for the downward movement of December 2

Trading recommendations:

Buy: 108.85 Take profit: 109.04

Buy : 109.08 Take profit: 109.30

Sell: 108.30 Take profit: 108.12

Sell: 108.08 Take profit: 107.80

analytics5de9b0f89d25c.png

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3237, 1.3216, 1.3198, 1.3172, 1.3155, 1.3138 and 1.3107. Here, we are following the development of the downtrend of December 3. Short-term downward movement is expected in the range 1.3172 - 1.3155. The breakdown of the latter value will lead to a movement to the level of 1.3138. Price consolidation is near this level. For the potential value for the bottom, we consider the level of 1.3107. Upon reaching this value, we expect a rollback to the top.

Short-term upward movement, as well as consolidation are possible in the range of 1.3198 - 1.3216. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3237. This level is a key support for the downward structure.

The main trend is the descending structure of December 3

Trading recommendations:

Buy: 1.3198 Take profit: 1.3215

Buy : 1.3217 Take profit: 1.3236

Sell: 1.3171 Take profit: 1.3155

Sell: 1.3154 Take profit: 1.3138

analytics5de9b11dc57f6.png

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. Short-term upward movement is expected in the range of 0.6830 - 0.6851. The breakdown of the level of 0.6851 will lead to a marked development of an upward trend. Here, the potential target is 0.6878, and 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

analytics5de9b144d1660.png

For the euro / yen pair, the key levels on the H1 scale are: 122.10, 121.90, 121.55, 121.29, 120.97, 120.66, 120.34, 120.10 and 119.64. Here, the price registered a local upward structure from December 4 to continue the upward trend. The continuation of the movement to the top is expected after the breakdown of the level of 120.97. In this case, the first 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 possibly in the range of 120.52 - 120.34. The breakdown of the latter value will lead to movement to the level of 120.10. This level is a key support for the upward trend.

The main trend is the local ascending structure of December 4

Trading recommendations:

Buy: 120.98 Take profit: 121.27

Buy: 121.30 Take profit: 121.55

Sell: 120.32 Take profit: 120.10

Sell: 120.05 Take profit: 119.70

analytics5de9b16ce726c.png

For the pound / yen pair, the key levels on the H1 scale are : 144.56, 144.06, 143.45, 143.09, 142.50, 142.06 and 141.51. Here, we determined the subsequent goals for the top from the local ascending structure on December 4. Short-term movement to the top is expected in the range of 143.09 - 143.45. The breakdown of the last value will lead to a pronounced movement. Here, the goal is 144.06. For the potential value for the top, we consider the level of 144.56. Upon reaching this value, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 142.50 - 142.06. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 141.51. This level is a key support for the top.

The main trend is the local ascending structure of December 4

Trading recommendations:

Buy: 143.10 Take profit: 143.44

Buy: 143.50 Take profit: 144.06

Sell: 142.50 Take profit: 142.10

Sell: 142.04 Take profit: 141.54

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

GBPUSD: pound is betting on the Tories' victory, but will Johnson fulfill his promise to implement Brexit by January 31,

analytics5de9ab73ca3d0.jpg

The pound has noticeably gained weight following opinion polls, which have shown growing expectations that the Conservative Party will significantly strengthen its position in the British Parliament following the election next week.

Investors are now looking positively at the British currency, since they are waiting for the completion of the Brexit process, which began more than three years ago and during this time has already managed to get tired of everything. The head of the Cabinet of the United Kingdom, Boris Johnson, promises to withdraw the country from the European Union on January 31, 2020 - market participants seem to believe him, but the pound is growing. Will the prime minister keep his promise? It's impossible to say for sure, because once he already missed when he promised to finish Brexit on October 30th.

It should be noted that the market reaction even looks somewhat ironic, since the pound fell to multi-year lows in August precisely on the news of Johnson's coming to power. Then GBP/USD traded near the lowest levels for more than thirty years. However, since then, the pound has risen in price by almost 10% against the US dollar, and Johnson's strengthening of positions is now perceived as good rather than bad news, and there is nothing surprising here. In less than five months, the prime minister managed to significantly bring the country closer to breaking the legislative deadlock.

analytics5de9ab8851d2f.jpg

According to some experts, the victory of Conservatives with Great Britain's subsequent exit from the EU is becoming preferable, as this will mean higher predictability in the economy and in the financial market.

"It seems that the pound could reach $1.35 at a fairly fast pace if the Conservatives win. In order to make further progress, we will need to ratify the Brexit deal, and then gain confidence that there will be a significant trading deal finalized with the EU," said Rupert Thompson, Head of Market Analysis, UK asset management company Kingswood Holding.

"The market's perceptions of the exact advantage the Conservatives will win in the election can be tracked by the pound. The stronger the pound, the higher the market's confidence in the ability of Conservatives to conduct a Brexit deal through Parliament," said Sean Darby, Jefferies strategist.

At the same time, analysts admit that the pound could fall if the Conservative Party does not win a landslide victory.

"The results of a recent YouGov poll have led many market participants to expect the pound to rise to $1.34 if the Tories win. The irony, however, is that the study follows a pattern very similar to the one we saw in 2017. Many of the polls turned out to be erroneous last time. I have a healthy dose of skepticism," said Jordan Rochester of Nomura.

According to BMO Capital Markets, one of the worst results of the December 12 general election in the UK will be a "suspended" Parliament for the pound, leading the GBP/USD pair to decline to 1.25.

"If GBP/USD trades at 1.30 at the time of the release of such news, we expect the pair to fall to at least 1.27, followed by further movement to 1.25 in one or two subsequent trading sessions" said BMO strategist Stephen Gallo.

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

EUR/USD: increasing headwinds for the US economy, the dollar loses its trump cards

analytics5de9a8c1236dc.jpg

26 out of 62 analysts recently surveyed by Reuters stated trade wars as the main factor in the change in the exchange rate of the US currency, the same as macro statistics in the US, seven respondents believe that the main factor is economic indicators in other countries, while three pointed to other reasons. Admittedly, most experts are on the right track.

Released on the eve of mixed data on the US labor market and business activity, as well as an unexpected change in the rhetoric of US President Donald Trump rolled the EUR/USD pair on a roller coaster.

The owner of the Oval Office said that substantial progress has been made in Washington's trade negotiations between China and the United States: dialogue between the parties is going very well. A rather unexpected statement by the US president after words about his readiness to wait until the end of 2020 before signing a comprehensive treaty.

According to Bloomberg, the United States and China are at the stage of agreeing on the question of which part of import tariffs should be rolled back, and the interim agreement will very soon lie on the table before the leaders of the two countries.

Market sentiment significantly improved amid this background, stock indices rose, and the defensive dollar, on the contrary, declined.

In addition, the greenback suffered from weaker-than-expected US employment data from ADP. The indicator increased by only 67 thousand in November with a preliminary estimate of 150 thousand. Given the close correlation of the indicator with Nonfarm Payrolls, it can be assumed that the US labor market report on Friday may turn out to be worse than expected.

analytics5de9a8d59046f.jpg

At the same time, the non-manufacturing index of the Institute for Supply Management fell to 53.9 in November from 54.7 recorded in the previous month.

"This week we saw weak data on the US, which negatively affected the mood for the dollar, as they indicate a slowdown in the US economy," said Scotiabank currency strategists.

The bears in EUR/USD were saved from defeat only by the index of managers in the eurozone services sector from Markit, which fell to 51.9 points in November from the level of October at 52.2 points.

"Recent data indicate eurozone GDP growth of only 0.1% in the fourth quarter, while the manufacturing sector continues to act as the main impediment on growth. It's alarming that the region's services sector is also on its way to its weakest quarterly growth in five years," said IHS Markit chief economist Chris Williamson.

Fans of the euro are hoping for an end to the Washington-Beijing trade war and a recovery in the European economy, including through fiscal stimulus called for by the eurozone's national governments, ECB President Christine Lagarde. According to the estimates of the Center for European Policy Studies, a fiscal stimulus of at least 3-4% of GDP is needed for a steady inflation rate in the EU to reach a 2% target and also for a related increase in the ECB deposit rate from the current -0.5% to zero. It is doubtful that the eurozone will do this.

Meanwhile, the growth rate of the USD index slowed to 2% in 2019 from 4% recorded in 2018, which indicates that the greenback is losing its trump cards.

Reuters experts predict that over the next six months, the EUR/USD pair will reach 1.12, and in twelve months - 1.15.

As for short-term prospects, the bears managed to repel the first storm of resistance at 1.1115, however, while the quotes are above 1.1055, the chances of a re-attack of the bulls remain quite high.

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

Canadian dollar optimism: strengthening and growing

analytics5de9a1b5c6351.jpg

This week has been quite favorable for the Canadian dollar. After the decision of the Bank of Canada to leave the interest rate unchanged at 1.75%, the loonie perked up and grew. Many experts predict a short term growth in the loonie.

Another driver of strengthening the loonie was the rapid rise in oil prices. It was also supported by the position of the leaders of the Bank of Canada, declaring the stability of the national economy. Earlier, Stephen Poloz, Governor of the Bank of Canada, focused on the fact that the country's economy is in good shape, therefore, it is not worth changing the current monetary policy.

Nevertheless, a number of economists believe that the regulator should consider reducing interest rates. This is necessary to stop the negative economic consequences of trade conflicts, experts are certain.

According to current statistics, in the third quarter of 2019, Canada's GDP grew by 1.3% year-on-year. According to economists, the growth of the Canadian economy will be below 2% by the end of this year. Experts believe that this indicator will remain at the current level for the next two years.

According to experts, the long trade confrontation between Washington and Beijing provides support not only for the greenback, but also for the Canadian currency. Experts note that the USD/CAD pair has a pronounced upward trend, which may increase in the near future.

analytics5de9a1cc14e05.png

At the moment, the USD/CAD pair rose to the level of 1.3185, but then returned to its previous frame. Nevertheless, experts are upbeat over the loonie.

analytics5de9a1f42ebee.png

The situation of the Canadian dollar is quite stable and encourages investors. The loonie has strengthened and is trying to maintain its position. Analysts were divided with regard to interest rates. For example, TD Securities experts are confident that the Canadian regulator will nevertheless reduce the rate by 25 basis points (bp), but this will happen no earlier than April 2020. Some analysts believe that everything will depend on the dynamics of economic data in Canada. In the event of their strengthening, a complete rejection of the forecast of a decrease in rates is possible.

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

Developing the trading idea for oil

Good evening, dear traders! I present to you the development of a trading idea for oil based on volumetric analysis!

Let me remind you that the idea for purchasing oil for the absorption of the decline last Friday was presented yesterday (12/04/19), which happened without the participation of America, because they had a public holiday. After that, the Americans traded for the next 2 trading sessions at prices that were not very profitable for sales, i.e. cheap relative to prices before the holidays.

The price increase occurred before the news on Oil Reserves, but this also increased the probability of a maximum update, since oil production was sharply reduced and today, there was an opportunity to add long positions in order to update the last maximum of 58.74.

As a result, 250 points were earned from the entry point 56.30 to the crossing 58.74. Moreover, it would bring +60 points when adding a long position or purchasing from oil reserves.

Forecast:

analytics5de99fd715480.png

Developing trading idea with a description:

analytics5de99fed1392b.png

Good luck in trading and follow the money management!

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

Pound's balancing act before decisive election

analytics5de99ddfedcbb.jpg

The British currency froze in anticipation of the upcoming changes that are associated with the upcoming elections in the country. According to experts, they will determine the further dynamics of the pound. Sterling is currently dominated by conflicting drivers, when turbulence alternates with a lull period.

The pound demonstrated the wonders of staying in balance on Wednesday, November 4, rising sharply after a long stagnation. The GBP/USD pair has skyrocketed after negotiations between the British government and US President Donald Trump. According to experts as another driver for the sterling's growth, the Conservative Party of Great Britain is highly likely to win. Against this background, the pound was growing rapidly, and this trend continues.

According to analysts, the dizzying rise in the price of the British currency is associated not only with its strengthening, but also with the weakening of the greenback. On Wednesday, the dollar index updated multi-week lows, and the pound took this opportunity.

The dynamics of the pound became a mirror of the ups and downs of the election campaign, instantly reacting to current events. At present, the main rivals of Prime Minister Boris Johnson, the Labour Party, are either gaining a majority of the votes or are on the verge of failure. The British currency also demonstrates similar somersaults, emerging from a state of stagnation and making a giant price leap.

On Wednesday, the pound rose above 1.3000 in the wake of reports that the Conservative Party of Great Britain is confidently holding the palm in the race. It was ahead of the Labour Party by 12 points, providing invaluable support to the pound. In addition, the current situation increases the chances of approving a deal with Brussels in early January 2020.

Sterling is currently celebrating a victory: it managed to overcome the most important key level of 1.3000, which the GBP/USD pair has not succumbed to since October 2019. Yesterday, the pair began to move forward, rising sharply to 1.3060.

analytics5de99df3368e4.png

As a result, the GBP/USD pair entered the upward trend, but periodically stagnated and even dropped to 1.3042–1.3043. However, these hitches were not a signal for a fall, but a springboard before the next jump of the British currency.

analytics5de99e28e47b3.png

After a while, the pound turned into a battering ram and managed to get to the psychologically important level of 1.3100. The market delightedly watched the British currency's surge.

analytics5de99e3fdb25c.png

Sterling also began on a major note on Thursday morning, December 5. Not only did it not lose its gained positions, but also managed to strengthen them. The GBP/USD pair ran in the range of 1.3111–1.3112, demonstrating a clear tendency to rapid growth. At the same time, buyers of the pound, who became the hero of the day, intensified.

analytics5de99e7cb1e8f.png

The pair met market expectations in the future. In a short period of time, the GBP/USD pair soared almost threefold. At the moment, it is trading within 1.3136-1.3137, trying to get to the following peaks.

analytics5de99e9332d7d.png

Many experts believe that the British currency will not lose stability with any outcome of the election. The market believes in the reliability and strength of the pound, which has repeatedly demonstrated growth in difficult circumstances. The positive dynamics of sterling helps it strengthen and grow, analysts summarize. Many experts expect the GBP/USD pair to rise to 1.3900 in 2020. In connection with the current price pound surges, growing exponentially, this forecast may become a reality.

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

GBP/USD. December 5. Results of the day. Pound will continue to grow under the influence of a single factor

4-hour timeframe

analytics5de9996fefd23.png

Amplitude of the last 5 days (high-low): 52p - 63p - 53p - 82p - 138p.

Average volatility over the past 5 days: 96p (average).

The GBP/USD currency pair continues its upward movement as if nothing had happened. Not a single important macroeconomic report was published either in the UK or in the US today, but this did not prevent traders from continuing confident purchases of the British pound. What does this day? Firstly, that traders continue to completely ignore all macroeconomic information, and secondly, that the political factor for the pound/dollar pair is not just in the first place, it occupies the only place in the list of factors that affect the movement of the pair. Thus, only one conclusion can be drawn now: the pound is growing and can continue to grow only on the expectations of market participants that the Conservative Party will win the parliamentary elections and not just win, but win with the necessary number of deputy mandates, which will allow Boris Johnson to implement Brexit under an agreement with the European Union unhindered, which was reached literally "in the last 5 minutes" back in October.

Based on the conclusions made, we can assume that tomorrow's macroeconomic statistics from the United States will either have no effect on the movement of the currency pair, or that it would but very restrained. The macroeconomic calendar for tomorrow is completely empty in the UK.

Thus, we can fully expect continued strengthening from the pound/dollar pair at the end of the trading week. About one week remains until the election date, the results will be known, most likely, on December 13th. Traders do not need to reduce long positions tomorrow, which is called "before the weekend." Considering the fact that in the last two months, the pound sterling shows growth solely on the expectations of the Conservative victory in the elections, nothing prevents traders from continuing to buy the pair tomorrow. In such a situation, when in reality only one factor affects the currency, it is best to pay attention to technical indicators. All of them are currently pointing up. The Heiken Ashi indicator (or MACD), for example, will show the willingness of traders to start a downward correction if they turn down and begin to color the bars in blue. The immediate goal, which we determined in the morning, based on the average volatility indicator for the last five days - 1.3196. The pair can even work today, or at least get close to it. A new goal will be obtained tomorrow, which is likely to be located at about $1.33 and will also be quite real to work out this week. After December 12, the future of the pound will depend entirely on the election results, so it makes no sense to guess where the pound could be for the New Year.

As for the likelihood that Conservatives will win the election, there is essentially nothing to talk about here, just look at the chart of the pound/dollar currency pair and everything becomes clear. If traders did not believe in victory, if rating and analytical agencies did not publish the results of opinion polls and social studies every day, which clearly indicate a 10-15% gap between the Conservatives and the Labour Party, then maybe the British currency would not grow on the eve of the elections. We can only once again warn traders that the political rating of Conservatives is now about 44-45%, which is far from necessarily converting to more than 50% of parliamentary seats. Of course, if Johnson's party gains 48% of the 650 seats in Parliament, then the deal with Brexit can also be considered resolved, it will be possible to gather Conservatives to vote for the deal with the European Union, but the total number of MPs less than 300 can already create certain problems and tighten Brexit for a few more months or even years.

The technical picture is now unambiguous - all indicators are directed upwards. Thus, it is recommended to continue to remain in purchases until the Heiken Ashi (or MACD) indicator turns down. During tomorrow's publication of macroeconomic reports in the United States, it is advised to be aware of open transactions, but we believe that there will not be a particularly strong reaction. And if the reports turn out to be weak, it can further push the pound to new heights.

Trading recommendations:

GBP/USD continues to move up. Thus, since the pair managed to get out of the side channel, it is now recommended to trade for an increase while aiming for 1.3196. New targets for buying the British pound will be determined in the morning review tomorrow. It is not advised that you consider selling the pound at the moment, as we are witnessing an upward trend, and the pair is very far from the critical Kijun-sen line.

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