Euro and pound keep weak bullish sentiment at the beginning of the week, while reducing uncertainty contributes to the growth

China and the United States concluded the current trade negotiations with a "first phase deal," which the markets see as a relative victory for the United States. However, changes will be made to the text before the official signing, but it is now clear that China is doubling its purchases of American agricultural products over the next two years, and is also committed to protecting intellectual property, opening up the financial services market and not "manipulating the currency."

In turn, the markets evaluate the outcome of the negotiations positively, while the demand for protective instruments will continue to decline.

EUR/USD

The strong growth of European PMI indices gave reason to hope that the peak of the crisis has been passed and strong growth will be recorded in the 4th quarter. But it is not clear whether there is a turning point or expectations at this stage are too optimistic. The German economy has suffered more than others, and therefore the probability of an equally rapid recovery will support the euro.

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On the other hand, the ECB left monetary policy unchanged at its meeting on December 12. The changes in forecasts are small and the ECB, at the current stage, considers it to be weak, and the risks prone to decrease.

Most market participants are skeptical about the ECB forecast for GDP at 1.1%, because a noticeable acceleration of quarterly growth rates is needed to reach this level, which is not yet observed. Meanwhile, inflation forecast until 2022 remains below the target of 2%, and it is obvious that the internal discussion at the ECB, though no longer public, has not disappeared - there are too many hints that many members of the Governing Council are looking for ways to get rid of the side effects of super soft monetary policy.

At the same time, Lagarde ignored many important points regarding the upcoming strategic review of the European economy during a press conference. Thus, the market reacted rather sluggishly to the results of the meeting.

EUR/USD continues to maintain a weak bullish mood. It is supported by the growth of the pound and the reduction of uncertainty on Brexit, as well as the increased probability of a US-China trade deal. By the end of the week, the euro reached a strong resistance of 1.12. Now, a test of this level is likely in the next day, and then continue to support 1.1100 / 10.

GBP/USD

Conservatives won an absolute majority in the general election held on December 12, which gives Boris Johnson the right to pass through parliament a decision to leave the EU before Christmas.

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Labor lost 59 seats, Jeremy Corbyn resigns, and now the final episode of the Games around Brexit is getting practical content. The exit from the EU is scheduled for January 31, and ratification of this exit will take place in 2020. The probability of such a development of events is, according to most experts, at least 90%.

The following question comes to the fore: future relations between the UK and the EU. Trade negotiations should be completed by December 31, 2020. However, this period seems to be insufficient (for example, negotiations with Canada on a similar agreement dragged on for 7 years, and another 11 months took full ratification). These considerations indicate a high probability of extending the transition period.

The likely consequences of the Tory victory for the British economy and Bank of England's actions are becoming less hazy. If the exit is issued on January 31, the uncertainty will decrease, which will enable BoE to make adjustments to its monetary policy. At the end of January, the current term of office of Mark Carney expires, which can either remain on the chair for a new term, or leave the chair. The probability of a rate cut in 2020 is still estimated to be low, but the probability of a one-time increase has increased, which ultimately provides the pound with additional support.

As a result, the pound rose 2.7% immediately after the publication of the first election results, followed by a correction. Technically, the pound retains its strength, strong support is in the zone 1.3100 / 30, and consolidation above 1.3381 opens the way to 1.4385 and 1.40, but in fact, there are no strong resistance. The pound also remains in a bullish mood. Thus, it is logical to use correctional reductions for purchases.

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Technical analysis of EUR/USD for 16/12/2019:

Technical Market Overview:

The EUR/USD pair has made a new local high at the level of 1.1199, but then quickly reversed towards the level of 1.1106, which is the technical support for bulls. The price is still above the short-term trend line support as well (thick orange line), so the bulls are still in control of the market, at least at the lower timeframes. The higher timeframes trend remains bearish, but the global investors must take into account, that the EUR/USD might be finally breakoing up from the multi-month Ending Diagonal pattern.

Weekly Pivot Points:

WR3 - 1.1337

WR2 - 1.1267

WR1 - 1.1190

Weekly Pivot - 1.1121

WS1 - 1.1048

WS2 - 1.0978

WS3 - 1.0897

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. The downtrend is valid as long as it is terminated or the level of 1.1445 clearly violated. There is an Ending Diagonal price pattern visible on the larget timeframes that indicate a possible downtrend termination soon. The key short-term levels are technical support at the level of 1.1040 and the technical resistance at the level of 1.1267.

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Control zones AUDUSD 12/16/19

The closing of today's trading will allow entering the position. If the close occurs above the WCZ 1/2 0.6880-0.6874, then purchases will remain a priority. The first growth target will be the December high. The upward movement is still momentum.

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Friday's fall of the pair may become a reversal, however, this will require continued decline and consolidation below the WCZ 1/2.

An alternative model to continue Friday's movement will develop if there is a consolidation below the WCZ 1/2. This will open the way for the pair to decline to the weekly control zone of 0.6820-0.6808. This range will be overcome fairly quickly due to the lack of strong support zones on the way down.

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

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

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

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Hot forecast for EUR/USD on 12/16/2019 and trading recommendation

In many ways, the single European currency as predicted, which initially rushed up after the pound, against the background of the results of the early parliamentary elections in which Boris Johnson won a crushing victory, began to adjust quite quickly. In fact, the rollback began almost immediately after the rise. However, the fact that according to the results of Friday, the single European currency closed in the red was funny. That is, first, the single European currency soared 70 points up, and then fell 80 points during the day.

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The fact that a rollback was inevitably due to a single European currency was quite predictable, and it went on as usual. After all, the growth of the single European currency was due solely to emotions, and not economic realities, and it is these very realities that became the reason for the end of the trading week. Moreover, the decline in the single European currency only intensified. Now, we are talking about retail sales in the United States, the growth rate of which accelerated from 3.2% to 3.3%. Of course, this in itself is a rather positive factor for the dollar, but if we add to this the recent inflation growth, the picture is generally wonderful from the point of view of business, as companies' profits will double in size - due to sales growth, as well as growth prices.

Retail Sales (United States):

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Composite Business Activity Index (United States):

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From a technical point of view, we are witnessing an attempt by the euro / dollar to gain a foothold at higher levels, and the range of fluctuations is still relatively large. The support level is located at 1.1115 while the resistance level is located at around 1.1165.

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EUR/USD, Preview of the week: focus on minor macroeconomic reports

The current trading week looks less saturated for the euro-dollar pair than the previous one. The pre-Christmas bliss is gradually coming into its own, and it will be felt more strongly in the coming days of December. However, the upcoming week is entirely working, so traders will still have time to take advantage of the volatility before the holiday period of suspended animation in the foreign exchange market.

As you know, China and the United States were able to conclude a temporary truce, last week, preventing the escalation of the trade war. Beijing has pledged to increase purchases of US goods (primarily agricultural products) in the next two years by $ 200 billion, while Washington has pledged not to impose "December duties" on Chinese imports of $ 160 billion a year. In addition, the States promised to halve 15 percent duties on 120 billion Chinese goods. At the same time, 25 percent duties on $ 250 billion of imports remain in force.

Now the parties are embarking on the second phase of negotiations, where the most complex and fundamental issues of a strategic nature will be discussed. And while many experts doubt that negotiators will be able to find a common denominator in the long term, the risk of an intensifying trade war has decreased significantly at the moment. Therefore, for EUR / USD traders, the macroeconomic reports that both European and American will again be at the forefront.

Today, the focus will be on PMI indices in the manufacturing sector and in the services sector where the corresponding releases will be published in Germany, France, and other European countries. Let me remind you that the recently published indices of sentiment in the business environment from the ZEW Institute in Germany and throughout the Eurozone provided significant support to the European currency. The German indicator in December showed the strongest growth in the last two years. The index was above zero for the first time since April and reached 10.7 points, which is so far the best result since February 2018. If today's PMI releases follow the ZEW trajectory, the Euro will receive additional support for its corrective growth. In general, experts anticipate positive dynamics, especially in the service sector. As for the manufacturing sector, the minimum growth is predicted in the chart below where the indices will still remain below the key 50-point level. But the very fact of a positive trend can strengthen the position of the single currency.

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On Tuesday, December 17, the strongest impact on the EUR / USD pair will be the production indicator in the US processing industry. Again to remind you, that the last production ISM was much worse than the forecast, reflecting the ongoing decline in activity, particularly in the manufacturing sector. The Fed also drew attention to this fact at its December meeting. Therefore, dollar bulls will react extremely sharply to the negative dynamics of this indicator. For two months (September and October), the indicator was in negative territory, but this time analysts are optimistic and according to general expectations, in November it will recover to 0.8%. If the indicator remains in the negative zone, the dollar may fall under a wave of sales. Also on Tuesday, Fed officials John Williams and Eric Rosengren will speak where the market can only react to Williams' comments, as Rosengren will lose the right to vote in the Committee next year.

On Wednesday, we will find out the final estimate of inflation growth in the Eurozone. I would like to note that despite negative forecasts, the consumer price index rose in November, reaching a one percent mark from the previous value of 0.8% (the growth forecast was at the level of 0.7%). Core inflation also showed a positive trend, rising from 1.1% immediately to 1.3%. This is the best result in the last six months. According to the consensus forecast, the final estimate will coincide with the initial data. If the indicators are revised upward by at least one-tenth of a percent, the European currency will again attract buyers. The ECB chief Christine Lagarde will also speak on Wednesday, but her speech will be ceremonial where she is expected to give a welcome speech at the colloquium in honor of Benoit Coeure, so she is unlikely to touch on "serious" topics.

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Thursday is full of events for other currency pairs (primarily with the participation of the pound, yen and Australian dollar), while the interest of the euro-dollar pair trailers may attract only the Fed-Philadelphia manufacturing index.

However, on Friday, the EUR / USD will react to the main index of spending on personal consumption, which measures the core level of spending and indirectly affects the dynamics of inflation in the United States. It is believed that this indicator is carefully monitored by members of the regulator. According to forecasts, the index will demonstrate contradictory dynamics where it will grow by 0.2% monthly and it will decrease to 1.5% annually. This release may have an impact on the dynamics of the pair only in case of strong fluctuations when the real figures differ significantly from the forecast values. Also, on the last trading day of the week, the US GDP figure for the third quarter of this year will be published. We will know the final estimate, which is projected to coincide with the original.

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Technical analysis for the week from December 16 to 21 for the GBP/USD currency pair

Trend analysis.

This week, the price will move up with the first target of 1.3514 - upper fractal (red dotted line). If it is achieved, the continuation of the work up from the target of 1.3761 - a pullback level of 76.4% (blue dotted line).

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Fig. 1 (weekly chart).

Complex analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Bands - up;

- Monthly chart - up.

The conclusion of the complex analysis - an upward movement.

The overall result of calculating the candle of the GBP / USD currency pair according to the weekly chart: the price of the week is likely to have an upward trend with the absence of the first lower shadow of the weekly white candlestick (Monday - up) and the presence of the second upper shadow (Friday - down).

An unlikely scenario: from the level of 1.3451 - a retracement level of 61.8% (blue dotted line); work down with a target of 1.3153 - a retracement level of 23.6% (red dotted line).

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EUR/USD trading plan for December 16, 2019. Positive supports for the euro.

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There's two important positive news for the euro:

1. The Conservatives got strong results in the British elections. B. Johnson's party won the largest majority in 32 years, since the time of Margaret Thatcher, giving Johnson an excellent chance of delivering Brexit by its deadline on January 31.

2. Finally, the US-China trade agreement has been concluded. Although it is still at "phase one" and has not yet been signed, the deal shows positive signs.

EUR/USD: last week, the euro had a good increase and reached a high of 1.1180 for 3 months.

However, by Friday evening, sellers were stronger and they were able to drop the euro to 1.1111.

Nevertheless, we are waiting for a new attempt to go up to 1.1200.

Keep purchases at 1.1035.

In case of a reversal, sell at 1.1035.

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Technical analysis for the week from December 16 to 21 for the EUR/USD currency pair

The pair moved up over the past week, but after almost reaching the retracement level of 61.8% - 1.1201 (blue dotted line), the price went down and closed below the retracement level of 23.6% - 1.123 (red dotted line). The price in the coming week will try to continue moving up.

Trend analysis.

This week, the price will move up with the first target of 1.11199 - the upper fractal (red dotted line). If you break through the top of this level, the next top target will be a pullback level of 76.4% - 1.1276 (blue dotted line).

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Fig. 1 (weekly chart).

Complex analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candle analysis - up;

- Trend analysis - top;

- Bollinger Bands - up;

- Monthly chart - up.

The conclusion of the complex analysis - an upward movement.

The overall result of calculating the candle of the EUR/USD currency pair according to the weekly chart: the price of the week is likely to have an upward trend, with the absence of the first lower shadow of the weekly white candlestick (Monday - up) and the absence of the second upper shadow (Friday - up).

An unlikely lower scenario - a 50% retracement level (blue dotted line) from the level of 1.1145. The first lower target of 1.1076 is a retracement level of 38.2% (red dotted line). If successful, the next lower target is the pullback level of 50.0% - 1.1039 (red dotted line).

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Overview and forecast for EUR/USD for December 16, 2019

Hello, dear colleagues!

The past week has been extremely volatile. The market was stormy, especially at the end of trading on December 9-13. The main influence on price movements was exerted by the elections in the UK and the next statements of US President Donald Trump, in his widely known Twitter account.

As for the British elections, there was a convincing victory won by the conservatives led by the current Prime Minister Boris Johnson. I will write about this in more detail in the next review.

On Friday night, Donald Trump tweeted that the trade deal with China is misinterpreted and far from resolved. Let me remind you that before this, the media, and the same Trump expressed confidence in the soon resolution of trade contradictions between Washington and Beijing through an agreement.

In theory, market participants have long had to get used to the extremely contradictory statements of the American leader. But the topic of a trade war between the United States and China is extremely important for the world economy, as it can significantly affect global economic growth, and provoke another global crisis.

This week, the eurozone and the US will report on the PMI indices, and the United States will publish GDP data. You can learn more about these and other events in the economic calendar. In this article, the main attention, as usual, will be paid to technical analysis and price charts of the euro/dollar currency pair.

Weekly

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Last week was mixed. Although the EUR/USD pair ended the trading on December 9-13 with a strengthening, the huge upper shadow of the last candle leaves many questions about the further ability of the quote to moving in a northerly direction. The upper shadow is much larger than the bullish body itself, this is the main point that allows us to doubt the prospects of further growth.

As you can see, the Kijun line of the Ichimoku indicator, the level of 1.1185 and the 50 simple moving average provided immediate resistance to the further rise. Now, to continue the rise, it is necessary to rewrite the previous highs at 1.11199 and close the trading of the current five-day period above the sign and a very strong level of 1.1200. Frankly, the task is not easy. Taking into account the shape of the last weekly candle and the price zone (near 1.1200), where the maximum values were shown, I see more chances at the trading on December 16-20 in a downward scenario. If this forecast is correct, we are waiting for the euro/dollar at 1.1090, 1.1053 and possibly near the key level of 1.1000.

In the case of alternative development of events, the euro will first have to rewrite the last highs at 1.11199, after which the players will have to overcome the important and very strong technical area of 1.1220-1.1250. Only a consolidation above 1.1250 will signal the further ability of the euro/dollar pair to move in a northerly direction. In this scenario, the subsequent targets will be 1.1280, 1.1300, 1.1335, and 1.1370. But that's another story. The number one task for EUR/USD bulls is to close trading on December 16-20 above the significant level of 1.1200.

Daily

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The candlestick patterns that appeared on the daily chart on December 12-13 should be considered bearish. For the picture to change, you need a big white candle with a closing price above Friday's highs of 1.11199. Once again, I emphasize that this mission is difficult to accomplish. The candlestick's upper shadow is too large for December 13, which indicates an extremely strong resistance of sellers near 1.1200.

In my personal opinion, at the current and subsequent trades, it seems more rational to search for points to sell the EUR/USD pair. If so, it is better to look for points to open short positions on the euro/dollar on the rise to 1.1142 and 1.1183.

At the same time, quite strong support lies in the area of 1.1000-1.0950, therefore purchases from here are technically quite justified. However, do not forget that long positions, in my opinion, have a corrective nature, and at any time can be replaced by a movement in the opposite direction.

The conclusion and the result are as follows: sales, at the moment, look like the main trading idea, purchases, counting on the correction, which creates much more risks. The final decision is exclusively individual. I have the honor to express my point of view, whether or not you agree with it.

Success and profits!

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Technical analysis: Important Intraday Levels For EUR/USD, December 16, 2019

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When the European market opens, some economic data will be released such as Flash Services PMI, Flash Manufacturing PMI, German Flash Services PMI, German Flash Manufacturing PMI, French Flash Manufacturing PMI, and French Flash Services PMI. The US will also publish the economic data such as TIC Long-Term Purchases, NAHB Housing Market Index, Flash Services PMI, Flash Manufacturing PMI, and Empire State Manufacturing Index, so amid the reports, the EUR/USD pair will move with low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1179. Strong Resistance: 1.1173. Original Resistance: 1.1162. Inner Sell Area: 1.1151. Target Inner Area: 1.1125. Inner Buy Area: 1.1099. Original Support: 1.1088. Strong Support: 1.1077. Breakout SELL Level: 1.1071. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, December 16, 2019

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In Asia, Japan will release the Tertiary Industry Activity m/m and Flash Manufacturing PMI. The US will also publish some economic reports such as TIC Long-Term Purchases, NAHB Housing Market Index, Flash Services PMI, Flash Manufacturing PMI, and Empire State Manufacturing Index. So there is a probability the USD/JPY pair will move with low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Resistance. 3: 109.96. Resistance. 2: 109.74. Resistance. 1: 109.50. Support. 1: 109.26. Support. 2: 109.05. Support. 3: 108.83. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD: plan for the European session on December 16. The electoral euphoria is over

To open long positions on GBPUSD, you need:

The victory of the Conservative Party of the United Kingdom in the elections and its majority in parliament, although it gave clarity, however, the uncertainty over which scenario the situation with Brexit will develop further forces pound buyers to take profits. The levels that I paid attention to on Friday, subject to a downward correction, have fully worked out and now the main task of the bulls is to consolidate above the area of 1.3378, which will allow the GBP/USD to continue growing in the short term. However, the return to the highs in the area of 1.3450 and 1.3523 will depend entirely on what will be the report on the UK services sector, which has recently been experiencing bad times. If you return to the support of 1.1.3378 in the first half of the day, you can return to long positions after the test of the minimum of 1.3316, provided that a false breakout is formed there, or buying the pound immediately on the rebound from the larger supports of 1.3265 and 1.3218.

To open short positions on GBPUSD, you need:

Bears will try to maintain the current downward momentum, however, to open short positions, it is best to wait for the release of the report on the UK services sector with the formation of a false breakout in the resistance area of 1.3450. A decline below the support level of 1.3378 in the first half of the day may also force buyers to retreat from the market, which will push GBP/USD back to the support area of 1.3316, the breakdown of which will provide a larger downward wave to the lows of 1.3265 and 1.3218, where I recommend taking the profits. In the scenario of growth of the pound above 1.3450 after the data on the services sector, it is best to look at short positions when updating the highs of 1.3523 and 1.3563.

Indicator signals:

Moving Averages

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

Bollinger Bands

If the pound falls, the lower border of the indicator around 1.3316 will provide support. A break above the upper level of the indicator around 1.3410 will lead to a new wave of growth of the pound.

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Description of indicators

  • Moving average (moving average determines the current trend by smoothing volatility and noise). Period 50. The chart is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing volatility and noise). Period 30. The chart is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - convergence / divergence of moving averages) - EMA Period 12. Slow EMA Period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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EUR/USD: plan for the European session on December 16. The euro will be under pressure after reports on the manufacturing

To open long positions on EURUSD, you need:

Friday's data on retail sales in the United States, although worse than economists' forecasts, but once again confirmed the fact that the economy continues to move on the path of growth. Now, buyers of the euro should count on the level of 1.1111, which I drew attention to my Friday's review. However, now, only the formation of a false breakout in the area of this range will be a signal to buy the euro. In the scenario of a breakout of 1.1111 in the first half of the day, after a weak report on the eurozone manufacturing sector, it is best to expect to buy from a minimum of 1.1073 or buy immediately on a rebound from 1.1041. The more important task of the bulls will be a breakthrough and consolidation above the resistance of 1.1153, which will lead to an upward correction in the area of the maximum of 1.1198, from where the euro sell-off began on Friday, where it is also recommended to take profits on long positions.

To open short positions on EURUSD, you need:

Sellers coped with the task and returned the pair to the support of 1.1111, which could not be broken the first time. At the moment, all the focus will be on this range, which can be passed after a weak report indicating further contraction of the eurozone manufacturing sector. A break of 1.1111 will open a direct road to the area of lows of 1.1073, and a more distant target of sellers will be the area of 1.1041, where I recommend fixing the profits. In the scenario of EUR/USD growth in the first half of the day above 1.1153, where I also recommend looking at short positions when forming a false breakout, it is best to count on selling from this month's maximum in the area of 1.1198 or sell even higher from 1.1226.

Indicator signals:

Moving Averages

Trading is below the 30 and 50 moving averages, which indicates the formation of a bearish market in the short term. The moving average test will also be a signal to open short positions in the euro.

Bollinger Bands

An unsuccessful consolidation above the average border of the indicator in the area of 1.1140 will be a signal to sell the euro. The downward movement can be limited to the lower level of the indicator in the area of 1.1095.

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Description of indicators

  • Moving average (moving average determines the current trend by smoothing volatility and noise). Period 50. The chart is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing volatility and noise). Period 30. The chart is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - convergence / divergence of moving averages) - EMA Period 12. Slow EMA Period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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EUR/USD approaching support, potential bounce!

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Trading Recommendation

Entry: 1.11079

Reason for Entry:

38.2% Fibonacci retracement, 78.6% fibonacci extension, horizontal overlap support

Take Profit : 1.11961

Reason for Take Profit: horizontal swing high resistance

Stop Loss: 1.10533

Reason for Stop loss:

61.8% Fibonacci retracement, horizontal swing low support

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EUR/JPY approaching support, potential bounce!

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Trading Recommendation

Entry: 121.292

Reason for Entry: 50% Fibonacci retracement, horizontal pullback support

Take Profit : 122.1638

Reason for Take Profit:

61.8% Fibonacci retracement, Horizontal swing high resistance

Stop Loss: 121.0268

Reason for Stop loss:

61.8% Fibonacci retracement, Horizontal pullback support

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USD/JPY approaching resistance, potential drop!

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Trading Recommendation

Entry: 109.953

Reason for Entry: 100% Fibonacci extension

Take Profit : 107.898

Reason for Take Profit: horizontal swing low support

50% Fibonacci retracement

Stop Loss: 110.654

Reason for Stop loss:

horizontal swing high resistance

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Forecast for EUR / USD on December 16, 2019

EUR / USD

During the profit-taking on Friday, the euro fell below the opening price of the day, stopping at the balance line on the daily chart, losing about 80 points. The signal line of the Marlin Oscillator remains in the growth zone, its end points up and the probability of growth remains. We have had a growth target of 1.1215 for November 12, 2018, where the Fibonacci level is 100.0%.

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On the four-hour chart, the correctional decline was stopped at the MACD indicator line. Marlin's signal line penetrated slightly below the zero line, the border which is dividing the growth zone from the decline zone, however, it immediately returned above it.

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The growth scenario is natural and consistent, but it has a pitfall in the form of emerging divergence on the Marlin Oscillator on the daily chart. Divergence can be formed later, with the development of the euro's upper goals, or it already did from the current levels.

The first signal for the implementation of such a declining scenario will be a decrease in prices below yesterday's low, which will automatically lead to overcoming its supports. The first goal will be the line of the price channel of the daily TF in the area of 1.1068. Overcoming this support will significantly increase the "bearish" potential and the targets will open at 1.1030 (on daily MACD line) and at 1.0985 with the Fibonacci level of 138.2%. We are waiting for the development of events.

Today, the December PMI on the eurozone and the US will be released. However, survey indicators, may not be able to determine the future direction of the market in such a difficult situation. Although tomorrow, the eurozone trade balance and industrial production in the US will come out where the main impulse might be set on Tuesday.

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Forecast for GBP/USD on December 16, 2019

GBP / USD

The British pound continues to grow after the strong momentum set on Friday. The growth goals are determined by the Fibonacci levels: 1.3443 (238.2%), 1.3590 (261.8%), 1.3650 (271.0%). Upon completion of growth, divergence may form in any of the indicated levels on the Marlin oscillator and the market, in turn, will reverse.

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On the four-hour chart, the price rises above the lines of balance and MACD. On the other hand, the Marlin indicator is in the growth zone. Meanwhile, price growth in the range 1.3590-1.3650 is accepted as the main scenario. However, we consider growth to be speculative, which we talked about in previous forecasts, and here, it is recommended to reduce the risks when buying.

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Forecast for AUD/USD on December 16, 2019

AUD / USD

On Friday, the Australian dollar was slightly higher than the first target of 0.6930 (maximum on November 5), but did not reach the nested line of the price channel. Meanwhile, further reduction of the "Australian" at a minimum of Friday (0.6864), which will lead to a decrease in prices under the price channel line, will open the immediate goal of reducing 0.6815 - to support the MACD line on the daily chart. Next, the target 0.6700 will open which will support the nested price channel line. On the daily chart, the emerging divergence on the Marlin oscillator by the current moment looks convincing already.

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On the four-hour chart, a decline to the signal level of 0.6864 will look like a price drop below the MACD line. For a full-fledged signal, it is necessary to fix the price under the signal level. On the other hand, a divergence formed on the Marlin.

The United States and China have reached a partial compromise on a trade deal - no new duties scheduled for December 15 will be introduced, but those introduced earlier with China's commitment to increase purchases of US agricultural products by 50 billion in two years will be retained. However, as you can see, China in reality has lost here, which may complicate the second stage of negotiations and is already putting pressure on the Australian currency.

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Fractal analysis of major currency pairs for December 16

Forecast for December 16:

Analytical review of currency pairs on the scale of H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1261, 1.1239, 1.1198, 1.1156, 1.1134, 1.1103, 1.1078 and 1.1046. Here, the price is in the correction zone from the ascending structure on November 29. Short-term movement to the top is expected in the range of 1.1134 - 1.1156. The breakdown of the last value will lead to a movement to the level of 1.1198. Price consolidation is near this level. The breakdown of the level of 1.1200 will allow you to count on movement towards a potential target - 1.1261. Upon reaching this level, we expect consolidation in the range of 1.1261 - 1.1239.

A short-term downward movement is expected in the range 1.1103 - 1.1078. The breakdown of the latter value will have the downward structure development from December 13. In this case, the potential target is 1.1046.

The main trend is the upward structure of November 29, the correction stage

Trading recommendations:

Buy: 1.1134 Take profit: 1.1154

Buy: 1.1158 Take profit: 1.1196

Sell: 1.1103 Take profit: 1.1080

Sell: 1.1076 Take profit: 1.1046

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3732, 1.3598, 1.3534, 1.3454, 1.3360, 1.3268 and 1.3164. Here, the price is in correction from the upward structure on November 27. The continuation of the movement to the top is expected after the breakdown of the level of 1.3454. In this case, the first target is 1.3534. Short-term upward movement is possibly in the range of 1.3534 - 1.3598, Here, price consolidation is expected. The breakdown of the level of 1.3600 will lead to a movement to a potential target - 1.3732. We consider the movement to this level as unstable.

Short-term downward movement is possibly in the range of 1.3360 - 1.3268. The breakdown of the last value will lead to a long correction. Here, the target is 1.3164. This level is a key support for the upward trend.

The main trend is the upward cycle of November 27, the correction stage

Trading recommendations:

Buy: 1.3455 Take profit: 1.3534

Buy: 1.3535 Take profit: 1.3596

Sell: 1.3358 Take profit: 1.3280

Sell: 1.3365 Take profit: 1.3170

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

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

The main trend is the downward structure of November 29

Trading recommendations:

Buy : 0.9864 Take profit: 0.9883

Buy : 0.9885 Take profit: 0.9913

Sell: 0.9820 Take profit: 0.9791

Sell: 0.9787 Take profit: 0.9745

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

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

Main trend: initial conditions for the top of December 12

Trading recommendations:

Buy: 109.63 Take profit: 109.96

Buy : 109.98 Take profit: 110.20

Sell: 109.23 Take profit: 109.08

Sell: 109.06 Take profit: 108.85

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

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

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

Trading recommendations:

Buy: 1.3196 Take profit: 1.3215

Buy : 1.3218 Take profit: 1.3252

Sell: 1.3145 Take profit: 1.3119

Sell: 1.3116 Take profit: 1.3095

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.7032, 0.7012, 0.6980, 0.6957, 0.6909, 0.6866, 0.6853 and 0.6832. Here, we continue to monitor the development of the ascending structure of December 10. The continuation of the movement to the top is expected after the breakdown of the level of 0.6909. In this case, the target is 0.6957. Short-term upward movement is possibly in the range 0.6957 - 0.6980. The breakdown of the last value should be accompanied by a pronounced upward movement. Here, the target is 0.7012. For the potential value for the top, we consider the level of 0.7032. Upon reaching this value, we expect a pullback to the bottom.

Short-term downward movement is expected in the range of 0.6866 - 0.6853. The breakdown of the last value will lead to an in-depth correction. Here, the target is 0.6832. This level is a key support for the upward structure.

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

Trading recommendations:

Buy: 0.6910 Take profit: 0.6955

Buy: 0.6958 Take profit: 0.6980

Sell : 0.6853 Take profit : 0.6834

Sell: 0.6830 Take profit: 0.6800

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For the euro / yen pair, the key levels on the H1 scale are: 122.87, 122.39, 122.04, 121.80, 121.38, 121.00 and 120.52. Here, the price is in a deep correction from the upward structure on December 9 and forms the potential for the bottom of December 13. The continuation of the movement to the bottom is possibly after the breakdown of the level of 131.38. Here, the first goal is 121.00. Price consolidation is near this level. The breakdown of the level of 121.00 will lead to a pronounced downward movement. Here, the potential target is 120.52.

Short-term upward movement is possibly in the range of 121.80 - 122.04. The breakdown of the last value will have the subsequent development of the upward trend. Here, the first goal is 122.39. This level is the key resistance for the top.

The main trend is the rising structure of December 9, the stage of deep correction

Trading recommendations:

Buy: 121.80 Take profit: 122.02

Buy: 122.06 Take profit: 122.35

Sell: 121.38 Take profit: 121.05

Sell: 121.00 Take profit: 120.60

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For the pound / yen pair, the key levels on the H1 scale are : 149.76, 148.43, 147.70, 146.86, 146.26, 145.21, 144.52 and 143.50. Here, the price is in correction from the upward structure on December 4. Short-term movement to the top is expected in the range of 146.26 - 146.86. The breakdown of the latter value will lead to a movement to the level of 147.70. Price consolidation is in the range of 147.70 - 148.43. The breakdown of the level of 148.45 will lead to a pronounced movement. Here, the potential target is 149.76. We expect price consolidation near this level.

Short-term downward movement is possibly in the range of 145.21 - 144.52. The breakdown of the latter value will lead to the development of a downward trend. Here, the potential target is 143.50.

The main trend is the local ascending structure of December 4, the correction stage

Trading recommendations:

Buy: 146.26 Take profit: 146.82

Buy: 146.90 Take profit: 147.70

Sell: 145.20 Take profit: 144.60

Sell: 144.48 Take profit: 143.55

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GBP/USD. Great Britain is outside the European Union. Problems begin even before the official Brexit.

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Fanfares died out, everyone was drunk from champagne, and the whole Kingdom celebrated the victory of Boris Johnson in the elections, and now the country really has the right to prepare for the final "divorce" from the European Union. Most likely, Boris Johnson will succeed in unhindered dragging his version of the "deal" with the European Union on Brexit through the new Parliament, which means that London and Brussels can announce the beginning of the "transition period" on January 31 (or even earlier). We said earlier that despite the strong appreciation of the pound against the optimism of traders regarding Brexit and the formation of a "majority government" by conservatives, the UK and the pound are now facing harsh everyday life. Moreover, pound may continue to strengthen in pair with the dollar, however, traders will begin to pay attention to macroeconomic statistics from Foggy Albion and from overseas sooner or later, and it does not need to be analyzed for a long time in order to draw appropriate conclusions. It is unequivocal, in favor of the American currency. Moreover, market participants can "remember" all those failed statistics from Britain in those two months when no one paid attention to it. If we add to this the still potentially long and complicated negotiations with the European Union on new trade relations between the bloc and the Kingdom, it becomes clear that the economic situation in the UK may continue to deteriorate, which will definitely negatively affect economic performance.And in the last three months, the main indicator of the state of the economy of any country – GDP - either showed negative growth rates, that is, decreased, or showed zero growth.

Nevertheless, this is not all the potential problems that may be encountered in the UK. The fact is that no less high-profile than Boris Johnson, Nicola Sturgeon won in her Scottish Parliament. From which her party scored 48 out of 59 possible seats. Sturgeon had also previously stated that Scotland is against leaving the European Union. Now, after the deafening victory of the Scottish nationalists, talk of holding a second referendum resumed. The leader of the Scottish National Party said that "the future of Scotland should be in the hands of the Scots." According to Sturgeon, British Prime Minister Boris Johnson has a mandate for Brexit in England, but does not have a mandate to withdraw Scotland from the European Union. Next week, the Sturgeon party will submit an official application for a referendum on independence. "It's not about to ask permission from the prime minister of Great Britain or any other Westminster politician. This is a confirmation of the democratic right of the people of Scotland to determine their future." Sturgeon emphasized. "Scotland cannot be a prisoner of Britain, it needs to be allowed to hold a referendum on independence, since it was on the verge of leaving the European Union against its will." summed up by the first minister of Scotland.

Thus, we believe that the UK can now face the new Brexit, even before the implementation of its own. Although it is difficult to say whether Nicola Sturgeon is able to hold such a referendum without the approval of London. And there is no doubt that London will not give approval. Thus,we can witness a new epic called "Scexit" (Scotland EXIT) very soon.

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GBP/USD. December 15. Results of the week. Parliamentary elections are already in the past. Brexit is on the horizon again

4 hour time-frame

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

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

On Friday, GBP/USD currency pair began a downward movement, which was justified immediately for a number of factors. Firstly, the correction was clearly brewing after the pair's 300-point growth on the night when the vote was counted in the parliamentary elections. Even then, the probability of the victory of the party of Boris Johnson grew to almost 100%, and traders worked out this information. Secondly, do not forget that the pound as a whole has been growing for the last two or three weeks almost without a break based on the same high probability that the Conservative Party will win the election. Thirdly, if we exclude a few weeks of flat, then the British currency has been growing non-stop for more than two months, since October 10. Thus, after the election is left behind, the best time has come to take profits and begin the correction of the pound / dollar pair. In addition, do not forget that the currency pair traders all this time (more than 2 months) have zealously ignored absolutely all macroeconomic reports and data, both from the UK and from the United States. It cannot be that traders never worked out this information or continued to ignore any macroeconomic reports in the future. And if so, then the pound will begin to fall because the UK economic indicators remain at the level "below the plinth". Recent months have shown a serious slowdown in inflation, a fall in business activity in all sectors, a drop in industrial production, and negative or zero GDP growth. As with such indicators of the state of the economy, the British pound will be able to continue growth against the US currency in the issuing country whose macroeconomic statistics began to accelerate and grow again in recent weeks. Moreover, we continue to insist that Brexit is definitely a positive development after a three-year saga and it seems that the current composition of the Parliament will finally be realized, but the UK's secession from the EU itself is another negative development for the economy, Great Britain and, accordingly, pound sterling. Thus, we are still waiting for the pair to turn down and start a new long-term downward trend. This, of course, is not the only possible scenario, but the most likely, from our point of view, and to be more confident, you need to wait for the reversal down technical indicators. By the way, we remind you that the Bank of England may lower the key rate at the next meeting or do it immediately after January 31.

Meanwhile, Boris Johnson, who remained the country's prime minister, continues to celebrate the victory and hand out interviews. Johnson has already stated that "this is an exceptional victory for his party" and thanked absolutely all the inhabitants of Great Britain, and those who voted for the conservatives, and those who voted for other parties. In the near future, Boris Johnson is going to vote in Parliament on his deal with the European Union and now, no one expects that any problems will arise with this. Most likely, an agreement with the European Union will be approved and in early 2020, the UK will begin an 11-month transition period before the country finally leaves the Alliance. On the other hand, the leader of the Labor Party, Jeremy Corbyn, apologized to the party members for the failed result, and promised to regain the confidence of the residents who had previously voted for the Labor Party, but now they have changed their choice and even hinted that he might resign. "We will learn from this defeat, first of all, after listening to the Labor voters whom we lost ... This party exists to represent them. We will regain their trust." Corbyn said. The leader of the party, which won 59 seats less than in the 2017 elections, said: "The election results were a crushing blow for everyone who needs real changes in the country. I wanted to unite the country that I love, and I am sorry that we did not manage. I take responsibility for that." Well, the leader of the third most popular party in the UK, Nicola Sturgeon, said that the results of the Scottish party should return Boris Johnson to "reality" and recognize that the party received the right to hold a second referendum on independence, winning in 48 counties. "The results of this referendum on Scottish independence will need to be taken much more seriously than in 2014," Sturgeon said. Thus, as we see, the Scottish government does not want to leave the European Union, which has been openly stated more than once, but wants to leave the United Kingdom, because it understands that now Boris Johnson and his plans can no longer be stopped.

Based on all this, we believe that the most interesting thing for the UK and the British pound is just beginning. Now the "transition period", negotiations on trade relations between the UK and other countries, and the "battle for Scotland" will begin. And all this is against the background of continuing to slow down the UK economy.

Trading recommendations:

GBP/USD has started a downward correction, which could develop into a full-fledged downward trend. However, while the price is above the critical line, the chances remain that the British currency will continue to grow with targets around 1.3504. Thus, a rebound in the price from the Kijun-sen line can provoke the completion of the correction and leave bulls in business. However, breaking through the critical line for traders will be the first step towards a new downward trend with the first goals near the lower border of the Ichimoku cloud.

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 indicators 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.

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EUR/USD. December 15. Results of the week. "Fragile" truce between Beijing and Washington.

4 hour time-frame

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

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

On Friday, December 13, EUR/USD currency pair began a round of downward correction after it had ideally developed the resistance level of 1.1173 and the upper line of the volatility channel - 1.1183, which was indicated as early as Friday morning. However, it should be recognized that for most of the last trading day of the week, the euro/dollar currency pair did not openly know what to do. Traders were confused as the Euro currency, during the night trading, managed to gain a foothold in the framework of the continuing upward trend (which raises great doubts from the point of view of fundamental validity) solely due to the crushing victory of the Conservative Party in the UK elections. That is, it is safe to say that the pound on the most important day of the year for itself simply dragged up and the euro. It is in this interpretation, because if the euro also responded to Brexit events, then it would start to rise in price simultaneously with the pound, that is, at least a few weeks earlier. Thus, the nightly growth of the Euro currency on Friday can be called a coincidence and does not fit into the big picture. Further, a much more logical correction began at the American trading session after the not quite justified growth of the European currency. Firstly, the end of the week is the best time to take profits on previously opened positions. Secondly, a point was immediately set in several cornerstones on Friday that worried and worried market participants for a long period of time. It's all about the same parliamentary elections in Great Britain (markets waited for them for about 2 months), about Brexit, which should now be realized before the end of January (markets have been waiting for this for more than three years), as well as the de-escalation of the trade conflict between the United States and China, which on Friday the 13th, agreed on a kind of ceasefire, but did not sign any agreements, even in the "first phase". That is, in fact, we know only from the words of the American president that the parties have agreed and will not introduce new duties against each other. In addition, part of the duties that are already in effect will be canceled.. According to media reports, China and the States should sign the relevant document in January. That is, purely hypothetical since the situation may change several more times until January.

Moreover, all the conditions that were announced by the States (not China and the States, but only the States) sound like this. Washington upholds 25% of trade duties that affect $ 250 billion worth of imports from China to the United States. Washington will lower $ 120 billion from China's import duties from 15% to 7.5%. And from December 15, it refuses to introduce new duties in the amount of another 160 billion dollars. In turn, Beijing is committed to buying more agricultural products, goods and services from America. We are talking about the amount of about $ 100 billion a year. However, it's hard to say how the issues of intellectual property protection and America's access to the financial sector of China were resolved. We believe that the agreements between Donald Trump and Xi Jinping are a very good sign for the entire world economy. This agreement gives real hope that the parties will continue the dialogue and eventually cancel all duties against each other and the trade war will end. However, from our point of view, it is still very early to open and drink champagne in this matter. Firstly, we would like to draw attention to the fact that more than half of imports from China remain under US duties. That is, in fact, the States only canceled half of the second package of fees in the amount of about $ 60 billion, that's all. The very first package of duties remained in operation. Thus, the global economy will continue to suffer due to the trade war between China and the United States. Secondly, we have already witnessed a situation where Beijing and Washington seem to have agreed, but at the last moment, Trump declared that "China is playing a dishonest game" or "does not comply with the terms of the agreement", introduced new duties and the trade war escalated. Thus, a trade war can erupt with renewed vigor at any time until the parties sign the agreement. Moreover, both sides note that the "first step" has been taken, but there are still a lot of complex and difficult issues that need to be addressed.

Based on the previously mentioned, we believe that the best reflection of the de-escalation of the trade conflict between the United States and China will be an improvement in macroeconomic indicators in both America and the European Union (since we are interested in the currencies euro and dollar). This has a more indirect relation to America, because macroeconomic statistics in the United States is at a fairly good level after the Fed has taken actions. However, everything is very bad in the EU, if we take economic indicators. It is the de-escalation of the trade conflict (if it is not only on paper and in sufficient volume) that can positively affect the performance of the EU economy. Thus, we will find out in the next few months if there is any reason for the global economy from the fact that Beijing and Washington have agreed?

Trading recommendations:

The EUR/USD pair started a new round of correction against the upward trend. Thus, long positions formally remain relevant with the goals of the resistance level of 1.1173 and 1.1183, but only after the completion of the current correction and the back fixation of the bulls above the Kijun-sen critical line. Now, it is formally possible to sell a pair of euro/dollars, since the Kijun-sen line has been broken through, but with targets 1.1079 and Senkou Span B line in small lots. Tomorrow morning, new and more accurate targets for trading will be determined.

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

Weekly EURUSD analysis

EURUSD is challenging important long-term resistance area. There is a confluence of resistance levels between 1.11-1.1160 that makes this area a very important area for the future price movement in EURUSD.

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Red lines - resistance trend lines

EURUSD is trying to make a higher high relative to the October highs. So far we have seen a higher low. A higher high will increase the chances of a weekly trend reversal signal, as price is breaking above the long-term downward sloping trend lines. Key support remains at 1.0980-1.10 area. Upside target in case we see a breakout is at 1.1260-1.13 at first. 1.14 will be expected to follow.

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

Weekly analysis of Gold

Gold price is trading right below the important medium-term resistance area and previous support at $1,490-$1,500. Short-term trend remains bearish as long as price is below that level, however the price pattern looks very similar to the price action during the start of 2019.

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Gold price back then formed a similar bullish flag pattern. We all know what followed. Gold bulls have a similar opportunity now. If Gold price recaptures $1,500 then we turn bullish looking for new highs towards $1,600 and higher. Support is found at $1,450. As long as price is above that level bulls maintain their hopes. If support fails to hold, then we should expect $1,400 to be challenged.

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