Hot forecast for GBP/USD on 12/17/2019 and trading recommendation

Apparently, the pound continued to be impressed yesterday by the results of the early parliamentary elections, and banally ignored basic macroeconomic statistics.

analytics5df88490b74b1.png

Nevertheless, if you look at this very statistics, the pound should have been reduced. After all, all indices of business activity showed a decline. In addition, it is still an extremely unpleasant call even if we are talking about preliminary data. Thus, the index of business activity in the services sector decreased from 49.3 to 49.0, while they expected growth to 49.8. Meanwhile, the manufacturing business activity index fell from 48.9 to 47.4, instead of growing to 49.5. As a result, the composite business activity index did not grow from 49.3 to 49.7, but decreased to 48.5. Therefore, the pound had clearly no reasons for optimism. So does British business.

Composite Business Activity Index (UK):

analytics5df884a9d9def.png

At the same time, it had a reason to decline, since preliminary data on business activity indices in the United States were clearly better than in the UK. In particular, the index of business activity in the services sector grew from 51.6 to 52.2, with a forecast of 52.0. However, the index of business activity in the manufacturing sector decreased from 52.6 to 52.5. Although this is still better than expected, since they expected a decrease to 52.2. As a result, the composite business activity index grew from 52.0 to 52.2. They just waited for growth to 52.3, but let the production index down. In any case, the data clearly indicate a decline in the pound, which did not happen yesterday.

Composite Business Activity Index (United States):

analytics5df884ba3200d.png

The pound began to become cheaper only today, apparently preparing for the upcoming data on the labor market, from a glance at the forecasts for which it is already becoming scary. Thus, the unemployment rate should increase from 3.8% to 3.9%, and the number of employees may decrease by another 10 thousand. Moreover, the number of employees decreased by 58 thousand in the previous month. The number of applications for unemployment benefits should be 29 thousand. In addition, the growth rate of the average wage, both taking into account bonuses and without them, should slow down from 3.6% to 3.4%. To simply put it, work should become less, and pay for it will also be less. As we can see, the picture is just amazing, and unsurprisingly, the pound is already going down. Thus, the confirmation of these forecasts will lead to further weakening of the pound. Nevertheless, there is a possibility that the pound will be able to resume its growth only if the data turn out to be significantly better than forecasts. But unfortunately, this is unlikely.

Unemployment Rate (UK):

analytics5df884ccdeff8.png

In terms of technical analysis, we see that the GBP / USD pair is rapidly recovering, relative to the momentum of the past days. At the moment, we managed to develop a little more than half of the candles on December 13, focusing below the level of 1.3300 and the downward interest does not end there. In fact, we see how the emotional background is decreasing, and everything is returning to its original course.

Considering the trading chart in general terms, we see that the upward movement locally threw us to the area of 1.3513, but failed to gain a foothold at these heights, thereby eventually having shadows and as a fact of return.

Thus, it is likely to assume that the downward interest will continue to persist in the market, where the quote is faced with the task of closing the impulse candle on December 13, focusing on the level of 1.3180.

Concretizing all of the above into trading signals:

- Long positions are considered in case of price fixing at higher than 1.3300.

- Short positions are considered in case of price fixing at lower than 1.3225.

From the point of view of a comprehensive indicator analysis, we see that indicators, relative to the hour and minute intervals, develop to decrease. In turn, the daily period still retains upward interest, against the backdrop of the recent rally.

analytics5df884df33ba4.png

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

Trading plan for EUR/USD for December 17, 2019

analytics5df88184eceb3.jpg

Technical outlook:

EUR/USD seems to be correcting lower towards 1.1050/60 levels, after having pushed through 1.1200 last week. The single currency pair seems to be fairly under control of bulls, and poised to push higher after a brief corrective drop to above levels. The recent boundary that is being worked upon is between 1.0981 and 1.1200 levels for now and fibonacci 0.618 retracement levels are also close to 1.1060 (not highlighted here). The EUR/USD pair is either expected to bounce back from 1.1050/60 to continue its uptrend or it might be looking to produce a more complex correction and re-test the 1.0981 lows before resuming higher. In either case, the overall bullish structure remains firmly intact until prices stay above 1.0879 support going forward. Trading point of view, it is safe to keep buying on any dips towards 1.1050 and through 1.0940/80 levels respectively. The upside potential targets remain unchanged for now and we should be well placed to witness rallies towards 1.1500 at least.

Trading plan:

Remain long and buy further on dips towards 1.1050, stop at 1.0879, target is above 1.1500.

Good luck!

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

Positive demand supports AUD and NZD, Kiwi still looks confident, and Aussie still follows the market

US stock indices reached new record highs after confirming the deal between the US and China, S&P managed to add 27% since the beginning of the year, and NASDAQ grew by 33%. Moreover, the results of the elections in the UK also contributed to reducing uncertainty, and as a result of which, the demand for profitable assets is growing, while bonds are being actively sold.

At the same time, euphoria regarding a trade transaction may turn out to be temporary. In essence, progress is only in the fact that new tariffs have not been put into effect, however, the key contradictions have not been removed. Thus, clarity may come on Friday. Optimism is likely to continue until this time.

NZD/USD

New Zealand's macroeconomic indicators look confident, and some slowdown in growth has not led to a change in the overall picture. Moreover, Westpac notes the highest level of consumer sentiment since Q1 in 2018, RBNZ sees the level of business optimism at the highest since October 2017, and ANZ notes a marked improvement in confidence in the business environment.

analytics5df87a78a117b.jpg

In addition, the rise in the ANZ Business Outlook survey is observed in almost all components of the index, but the most important component is growth in production. Most companies announce their intention to expand recruitment and increase investment, which looks rather unexpectedly against the backdrop of a global trend to reduce production.

In general, a positive reversal of a number of leading indicators can be noted, with GDP expected at 2.3% at the end of 2019. Obviously, part of these changes is explained by the rapid decrease in the RBNZ rate by 0.75% this year, and ANZ believes that this will not end there and another reduction will occur next year.

On Thursday, updated data on GDP in the 3rd quarter will be published. Trade balance in November, optimistic forecasts, and expectations support the growth of Kiwi, despite the short-term technical overbought.

The resistance zone of 0.6635 / 50 may turn out to be too strong for the current impulse; therefore, a correction to 0.6575 with subsequent consolidation is likely. On the other hand, any decline can be used to make purchases, since the momentum is still strong and the chances of reaching the year maximum of 0.6790 are quite high.

AUD/USD

The publication of the minutes of the RBA meeting did not bring any new information to the markets; the Australian dollar did not respond to the publication. The RBA, in turn, noted that a number of central banks have loosened monetary policy in response to the risks of declining global economies and suppressing inflation, which has led to better financing conditions for corporations, and a recent reduction in the RBA rate to lower lending rates for households.

Meanwhile, financial conditions are improving, but this improvement is only reflected in the growth of stock indices. In a December business activity survey, Commonwealth Bank noted a further decline in PMI, with the manufacturing sector showing the sharpest decline in 44 months. As a result, production is declining, despite the improvement in the situation with new orders.

analytics5df87aa086ca6.jpg

For the first time in 5 months, companies reduced their workforce, reduced raw material costs, and the overall situation is hardly positive. The low level of spending noted in the 3rd quarter will continue in the 4th, which increases the risk of weaker GDP growth than the market sees.

In turn, the pause in the actions of the RBA seems justified so far, but the November employment report, which will be published on Thursday morning, is of particular importance, since its results can lead to decisive action by the RBA at the next meeting.

As a result, the Australian dollar joins the wave of optimism, despite the rather weak internal indicators. The growth of AUD also relies on expectations of rising prices for raw materials, primarily oil. On Tuesday morning, AUD/USD is located near the support zone of 0.6850 / 60. From these levels, an attempt to resume growth is possible in order to gain a foothold above the resistance of 0.6924.

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

Simplified wave analysis for EUR/USD and AUD/USD for December 17

EUR/USD

Analysis:

The upward wave of the euro since the beginning of September forms the main direction of the price movement. Its last section on November 14 ran into strong resistance. From it, the price rolls down. The rollback structure does not show completeness.

Forecast:

Today, the movement is expected to continue in the sideways price corridor between the counter zones. In the first half of the day, the price rise is more likely. By the end of the day, you can expect a change in the movement vector and a decline to the support zone.

Potential reversal zones

Resistance:

- 1.1170/1.1200

Support:

- 1.1110/1.1080

Recommendations:

Today, trading in the euro market is possible within the intraday according to the expected sequence. A lot more sensible to reduce. In the support area, it is recommended to monitor the signals of completion of the correction to find the entry into long positions.

analytics5df87a459c2d2.jpg

AUD/USD

Analysis:

The short-term rate of Aussie quotes is directed towards the global trend of the pair to decline. The wave is formed laterally, along with strong large-scale resistance. The structure of the wave lacks the final part. The downward section from December 13 has a reversal potential.

Forecast:

Today, the probability of price movement in the lateral plane is high. The range of the daily course is limited by the nearest oncoming zones. After an attempt to put pressure on the support zone, a reversal and the beginning of price growth is expected.

Potential reversal zones

Resistance:

- 0.6920/0.6950

Support:

- 0.6860/0.6830

Recommendations:

The pair's sales are premature today. Short-term purchases with a reduced lot are possible. In the area of the resistance zone, it is recommended to track the instrument's sell signals.

analytics5df87a7b2fbf6.jpg

Explanations: In the simplified wave analysis (UVA), waves consist of 3 parts (A-B-C). The last incomplete wave is analyzed. The solid background of the arrows shows the formed structure for determining the expected movement.

Attention: The wave algorithm does not take into account the duration of the tool movements in time!

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

Trading plan on EUR/USD for December 17, 2019. The Euro keeps growing.

analytics5df86212a5cf5.jpg

Following the British pound, the euro rose on several events:

1. Strong victory for the Conservatives in Britain and clear Brexit prospects

2. Positive conclusion of the Trump-China trade deal (phase 1)

3. Fed's soft stance on rates

However, the market went to the correction since the strength of the euro buyers was not enough to consolidate above 1.1200

Nevertheless, growth is not broken.

EUR/USD

We are waiting for a new hike to 1.1200 and consolidation above this level.

Keep purchasing at 1.1035

Possible purchases with a breakthrough at 1.1200 and up

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

AUD/USD. RBA minutes prepared the aussie for worst-case scenario

The minutes of the RBA December meeting published during the Asian session put pressure on the Australian dollar. Details of the central bank's final meeting this year were not as encouraging as it seemed. Let me remind you that the aussie strengthened by more than a hundred points at the end of this meeting, developing large-scale corrective growth. However, sellers seized the initiative this week: a negative economic forecast from the Australian government was published on Monday, and today the dovish minutes of the last RBA meeting. On Thursday, December 19, another release is expected, which may put additional pressure on AUD/USD - we will find out data on the growth of the Australian labor market. If all fundamental factors converge against the Australian dollar, then the pair may soon return to the framework of the 67th figure.

analytics5df87825218ec.jpg

Let me remind you that the December meeting of the Reserve Bank of Australia took place just a day before the publication of key data on the country's economic growth during the third quarter. According to this release, GDP fell to 0.4% (compared with the second quarter), while the general forecast was at 0.5%. In annual terms, the country's economy slowed to 1.7%. Australia's GDP has been declining since the middle of last year, largely due to lower consumer spending. For example, in the third quarter, expenses increased by 0.1% - this is the weakest result since 2008.

Published Australian GDP growth data reinforced concerns that the regulator will resort to another round of rate cuts at the beginning of next year. The minutes of the December meeting only reinforced these expectations. The published document was clearly dovish. Although the RBA members agreed to pause until the beginning of next year, they made it clear enough that the cycle of easing monetary policy was not yet completed. The central bank took a break to assess the effectiveness of the measures already taken. A triple rate cut had an impact on Australia's housing market, and this fact required additional consideration. But in general, judging by the minutes, the RBA members are ready to further soften the parameters of monetary policy.

It is noteworthy that central bank officials focused on the labor market: they announced that they would closely monitor the dynamics of relevant indicators, including in the context of determining the future prospects of monetary policy. Let me remind you that the previous release was devastating for the Australian dollar. The unemployment rate unexpectedly rose to 5.3% (against the forecast of 5.2%), and the employment rate collapsed into the negative area. Moreover, this indicator has updated three-year lows - the number of employees suddenly decreased by 19 thousand. The negative dynamics in October was demonstrated by both the component of full employment and the component of part-time employment.

As I noted above, labor market data for November will be published this Thursday. In the light of the RBA minutes published today, this release will be of particular importance for the AUD/USD pair. The consensus forecast looks contradictory. The unemployment rate should remain at the October level (that is, at around 5.3%), while the number of employees can grow by 15 thousand. It is important that this increase be due to full (rather than partial) employment, as regular positions require higher salaries and contribute to higher consumer spending.

analytics5df878385eb73.jpg

Thus, the minutes of the last RBA meeting this year reflected the willingness of its members to further reduce the interest rate - even without taking into account the deceleration of the country's GDP growth in the third quarter (since the data were published the day after the meeting). I believe that if the RBA members operated on these numbers, then the tonality of the minutes would be even more dovish.

The government of Australia added fuel to the fire, as it lowered forecasts of a budget surplus for the current and next financial years. On Monday, a semi-annual economic forecast was published, according to which the country's GDP growth for the current financial year was revised from 2.75% to 2.25%. Among the main reasons are the negative consequences of a trade conflict between the United States and China. With regard to unemployment, this figure, according to cabinet ministers, will amount to 5.3% next year, while inflation will remain in the region of the two percent mark. At the same time, the forecast for wage growth was reduced from 2.75% to 2.5%.

Summing up, it should be noted that the Australian dollar is declining not only because of the soft position of the Australian central bank. The external fundamental background also puts pressure on the aussie. Washington and Beijing have entered into an interim agreement, but barrage tariff barriers continue to operate, adversely affecting the global economy. At the same time, the second phase of the negotiation process promises to be more difficult than the first, given the list of unresolved issues. Against this background, weak macroeconomic statistics will actively pull down the AUD/USD pair, at least to the first support level of 0.6820 - this is the middle line of the Bollinger Bands indicator on the daily chart.

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

GBP/USD: plan for the European session on December 17. Weak services and Brexit uncertainty force buyers to take profit on

To open long positions on GBP/USD you need:

Yesterday's report on a decrease in business activity in the service sector, as well as the uncertainty of the Brexit deal are forcing buyers to take profits on the pound. However, in general, the current downward correction still does not jeopardize the upward trend formed at the beginning of this month. The bulls need a return to the resistance of 1.3316, which will increase the demand for the pound and lead to a larger upward correction in the area of 1.3378 and 1.3450. Yesterday I paid attention to support at 1.3265, which performed its function. The formation of a false breakout on it in the morning, along with good data on the UK labor market will be a good signal to open long positions in GBP/USD. Under the scenario of further downward correction, the bulls will begin to act more at lows of 1.3218 and 1.3164, where an attempt will also be made to build the lower boundary of the upward price channel to continue the pound's growth.

To open short positions on GBP/USD you need:

Bears are gradually pushing the pound down and now their main task will be to return to the support level of 1.3265, as it was yesterday with the level of 1.3378 after the data on the service sector. A weak report on the UK labor market may repeat the fate of 1.3378, but already in the area of 1.3265, which will lead to a downward correction to the low of 1.3218 and 1.3164, where I recommend taking profits. Under an upward trend scenario, the formation of a false breakout at 1.3316 will be the first signal to sell the pound. Otherwise, it is best to open short positions only after an update of 1.3378, in order to correct 20-30 points down within the day, or sell immediately for a rebound from the high of 1.3450.

Signals of indicators:

Moving averages

Trade is conducted below 30 and 50 moving averages, which indicates that the pound could possibly fall in the short term.

Bollinger bands

In case the pound falls, support will be provided by the lower boundary of the indicator at 1.3316. A break above the upper level of the indicator at 1.3410 will lead to a new wave of pound growth.

analytics5df862e6a1bc5.png

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
The material has been provided by InstaForex Company - www.instaforex.com

AUD/USD approaching support, potential bounce!

analytics5df85b34dd30d.png

Trading Recommendation

Entry: 0.68540

Reason for Entry:

61.8% Fibonacci retracement, 61.8% fibonacci extension, horizontal pullback support

Take Profit : 0.69297

Reason for Take Profit: horizontal swing high resistance

Stop Loss: 0.68321

Reason for Stop loss:

78.6% Fibonacci retracement, horizontal pullback support

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

GBP/USD approaching support, potential bounce!

analytics5df85a0b57a09.png

Trading Recommendation

Entry: 1.3233

Reason for Entry: 38.2% Fibonacci retracement, horizontal pullback support, 100% extension, breakout level

Take Profit : 1.35915

Reason for Take Profit:

100% extension

Stop Loss: 1.30193Reason for Stop loss:

61.8% Fibonacci retracement, Horizontal pullback support

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

USD/JPY approaching resistance, potential drop!

analytics5df859aea1880.png

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

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

Technical analysis: Important Intraday Levels For EUR/USD, December 17, 2019

analytics5df856eb73014.jpg

When the European market opens, some economic reports will be released such as Trade Balance and Italian Trade Balance. The US will also publish the economic data such as IBD/TIPP Economic Optimism, JOLTS Job Openings, Industrial Production m/m, Capacity Utilization Rate, Housing Starts, and Building Permits, 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: 1.1192. Strong Resistance: 1.1186. Original Resistance: 1.1175. Inner Sell Area: 1.1164. Target Inner Area: 1.1138. Inner Buy Area: 1.1112. Original Support: 1.1101. Strong Support: 1.1090. Breakout SELL Level: 1.1084. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, December 17, 2019

analytics5df85674e9503.jpg

In Asia, Japan will not release any economic reports today, while the US will publish some economic data such as IBD/TIPP Economic Optimism, JOLTS Job Openings, Industrial Production m/m, Capacity Utilization Rate, Housing Starts, and Building Permits. 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 : 110.13.

Resistance. 2: 109.91.

Resistance. 1: 109.67.

Support. 1: 109.42.

Support. 2: 109.21.

Support. 3: 108.993.

(Disclaimer)

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

EUR/USD: plan for the European session on December 17. Euro will come under pressure after reports on the eurozone manufacturing

To open long positions on EURUSD you need:

The situation is identical to the last day and the technical picture has not changed. Data on manufacturing activity in the US and business activity in the service sector did not affect the greenback in any way, even though it turned out to be quite acceptable. At the moment, buyers of the euro can still count on the level of 1.1111. However, now, when a false breakout forms in the region of this range, this will be a signal to buy the euro. In case there is a breakout of 1.1111 in the morning, after a weak report on the balance of the balance of foreign trade of the eurozone, and other important data are not released today, then it is best to count on purchases from a low of 1.1073, or immediately buy on a rebound from 1.1041. The more important task of the bulls will be to consolidate above the resistance of 1.1153, around which it had traded all day just yesterday. Its breakthrough will lead to an upward correction of EUR/USD to the area of a high of 1.1198, but the farther target of the bulls will be the level of 1.1226, where I recommend and take profits for long positions.

To open short positions on EURUSD you need:

Currently, all emphasis is on keeping the pair below the resistance of 1.1153, which the bulls have already tried several times to break yesterday, and also today at the Asian session. The next formation of a false breakout at this level, which may coincide with a weak report on the balance of the balance of foreign trade in the eurozone, will be a signal to open short positions, the purpose of which will be the lower boundary of the side channel of 1.1111. However, only a breakthrough of 1.1111 will open a direct road to the area of lows of 1.1073, and the farther target of sellers will be the area of 1.1041, where I recommend taking profits. With a EUR/USD growth scenario in the morning above 1.1153, it is best to count on sales from the high of this month in the area of 1.1198, or sell even higher from 1.1226.

Signals of indicators:

Moving averages

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

Bollinger bands

Volatility is very low, which does not provide signals on entering the market.

analytics5df85f2627528.png

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
The material has been provided by InstaForex Company - www.instaforex.com

Forecast for EUR/USD on December 17, 2019

EUR/USD

As a result of Monday, the euro grew by 21 points. At the moment, the price reached the Fibonacci line of 110.0% on the daily chart, from which it retreated. Eurozone business activity indices for December came out mixed: Services PMI grew from 51.9 to 52.4, Manufacturing PMI fell from 46.9 to 45.9. The situation was similar in the US: Services PMI grew from 51.6 to 52.2, Manufacturing PMI fell from 52.6 to 52.5. Today, more important data will come out: the eurozone trade balance for October is expected to grow from 18.3 billion euros to 19.7 billion. US industrial production may show an increase of 0.8% in November, the forecast for US housing starts in November is 1.34 million against 1.31 million in October. The technical neutrality of the euro may move down due to these data. The first significant goal is the price channel line on the daily chart in the area of 1.1062. A decrease in prices by 30-40 points will form the already emerging divergence on the Marlin oscillator.

analytics5df856a640d68.png

On the four-hour chart, the price is slightly higher than the MACD indicator line (blue), consolidating below it (1.1125) will significantly enhance the development of the downward movement.

analytics5df856bc2d5d3.png

Consolidating the price over yesterday's high (this is an alternative scenario) will increase the likelihood of movement to 1.1215 - the Fibonacci level of 100.0%.

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

Forecast for GBP/USD on December 17, 2019

GBP/USD

The British pound is down for the second day after its extreme growth on Friday. Western media suddenly became worried about the Brexit conditions and the options for the upcoming trade agreement with the United States, which confirmed our assertion about the speculative growth of the pound. Against this background, weakened PMIs seemed almost like a "collapse of hope"; in the manufacturing sector, PMI fell from 48.9 to 47.4 in December; in the service sector, it fell from 49.3 to 49.0 against the forecast for an increase in both indicators. Employment data will be released today in the UK; unemployment is expected to rise from 3.8% to 3.9%. We are waiting for the price reduction to the Fibonacci level of 200.0% (1.3206). Consolidation under the level will open the way to the target range of 1.3012/50, formed by the extremes on October 21 and December 12. The MACD line of the daily scale is striving in this range.

analytics5df8540a79917.png

On the H4 chart, the price is struggling with the support of the MACD line (blue) and the balance line (red). Consolidation under these will be the simultaneous development of the first target level of 1.3206. Marlin indicator in the negative trend zone. Next, we are waiting for consolidation under 1.3206.

analytics5df8541f68857.png

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

Forecast for USD/JPY on December 17, 2019

USD/JPY

The dollar grew by 17 points against the yen yesterday on, albeit a shaky, US agreement with China on the first stage of the trade agreement. China's industrial production in November added 6.2% y/y against the forecast of 5.1% y/y, retail sales increased from 7.2% y/y to 8.0% y/y. On the daily chart, the price overcame the control range of 109.30/50 in order to grow to 110.00 - to the green price channel line, but the Marlin oscillator sharply slowed down in growth, forming a third peak on the resistance of the forming line. The indicator can fall from it. In this case, the first price target will be the MACD line in the area of 108.93.

analytics5df851aa7ec52.png

On the four-hour chart, Marlin is more pronounced declining against rising prices. It is very likely that the dollar will not grow further, the price will return to the control range of 109.30/50 and, when the price falls below its lower boundary, it will attack the resistance of the MACD line at 109.08 (which is very close to the mark of the MACD line on daily).

analytics5df851bfabaac.png

Today, the US economic data and the corresponding growth of stock markets can overcome the reversal situation. Industrial production is expected to grow by 0.8% in November, while the forecast for new home mortgages is 1.34 million in November against 1.31 million in October.

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

Fractal analysis of the main currency pairs for December 17

Forecast for December 17 :

Analytical review of currency pairs on the scale of H1:

analytics5df838dfb551c.png

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

analytics5df838fc3d9c6.png

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.

Meanwhile, consolidated 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: Take profit:

Sell: 1.3365 Take profit: 1.3170

analytics5df83940e47bc.png

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

analytics5df8395bed9c1.png

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

analytics5df83a26e0ddf.png

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, 1.3094 and 1.3034. 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 in the range of 1.3118 - 1.3094. For the potential value for the bottom, we consider the level of 1.3034. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 1.3196 - 1.3217. The breakdown of the last 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: 1.3092 Take profit: 1.3040

analytics5df83a3f15669.png

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

analytics5df83a9030b04.png

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 correction from the ascending 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 121.38. 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.

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

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

Trading recommendations:

Buy: 122.06 Take profit: 122.35

Buy: 122.41 Take profit: 122.85

Sell: 121.38 Take profit: 121.05

Sell: 121.00 Take profit: 120.60

analytics5df83aaaa96e2.png

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

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

Trading idea for GBP/USD pair

Good evening, dear traders! I present to your attention a trading idea for the GBP/USD pair.

So, the Conservatives won the parliamentary elections in the UK, and now, no one doubts that the party of Boris Johnson will bring Brexit to its logical conclusion. On this news, the GBP/USD pair increased by 3500p for 5zn namely at the time of the announcement of the preliminary results of the parliamentary elections. And all would be nothing - both positive and joy for Britain. Thus, only those who already knew does not speak about it. However, no one here says how it is possible to earn money on it now. Therefore, I suggest one simple trading idea based on the "Hunt for Feet" method, and it consists of developing the stops of pound buyers, from Friday, as well as today. The fact is that over the past 1.5 days, buyers can become (put their stops) only at the level of 1.33, which is also round. It is believed that this is a great goal of "stop hunters", and you can quite easily implement it by using the signals of your strategies on smaller time frames to enter.

analytics5df818712358e.png

As usual, it is recommended to develop against the "crowd." Following a strategy is a distinctive feature of successful trading.

Good luck in trading and follow the money management!

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

EUR/USD: dollar pessimism due to Manufacturing PMI and restrained optimism of the euro due to Guindos

The euro-dollar pair is dominated by optimistic sentiment, despite the negative data on the growth of PMI indices in key European countries. Partly, such price dynamics are associated with the weakness of the US currency (the dollar index continues to decline to the bottom of 96 points), and partly due to encouraging comments from the ECB. The news flow from the UK also provides background support for the euro, thanks to which the EUR/USD pair was able to recover by the middle of the 11th figure.

analytics5df8182cc3643.jpg

Although the single currency was under pressure throughout the market after the release of disappointing PMI growth data. The German manufacturing activity index fell even deeper (to 43.4 points), contrary to expectations of low growth. The indicator is below the key 50-point mark since January of this year, which indicates a worsening situation in this sector of the economy. A similar index in France was higher than this target, but still showed a negative trend, dropping to around 50.3 points. In the whole eurozone, the index of business activity in the manufacturing sector reached 45.9 points - this is one of the worst results this year. In the service sector, PMI indices turned out to be slightly better - in Germany, France and the eurozone as a whole, the corresponding indicators showed positive dynamics.

After the publication of the above releases, the EUR/USD bears tried to develop a downward movement in the pair, but the bulls almost immediately seized their initiative. Firstly, the single currency received support from the ECB. So, the head of the National Bank of Austria (and at the same time a member of the Governing Council of the central bank) Robert Holtzman allowed an increase in the interest rate next year - if key economic indicators demonstrate steady growth. But it's worth noting that Holtzman is a consistent hawk - in particular, in September he was one of those who opposed a return to QE, and in October he announced that the ECB should refuse negative rates "as much as possible.'' Therefore, his comments today were perceived accordingly.

But the words of the European Central Bank Vice President Luis de Guindos really surprised the market participants. He stated that recently published macroeconomic data speak of "stabilization of the eurozone economy." Apparently, he had European inflation indicators in mind, as well as ZEW reports published last week. It is noteworthy that the ECB vice president not only "praised" the latest trends, but also once again criticized the ultra-soft measures on the part of the regulator. In his opinion, low rates, firstly, negatively affect the profitability of the banking sector, and secondly, negatively affect the financial stability of the eurozone. Although back in October, he did not rule out a lower interest rate further into the negative area. At the same time, Guindos often recalls the side effects of an extremely soft monetary policy. Let me remind you that back in September, the ECB announced the introduction of a two-tier system for applying the deposit rate. According to the rules of this system, part of deposits placed by banks with the ECB is exempted from the negative rate. According to available information, it was Guindos who was the main lobbyist for the introduction of this system - in his opinion, it will mitigate the negative effects of the latest monetary decisions of the ECB.

Thus, EUR/USD traders have received confirmation that the ECB is likely to maintain a wait-and-see position in the foreseeable future. By and large, Christine Lagarde voiced similar intentions at her first meeting of the ECB (and last this year). This fact makes it possible for traders to ignore weak PMI data in the manufacturing sector, despite the continued decline.

It is also worth noting that the correctional growth of the pair is also due to the weakness of the US currency. The dollar index fell at the beginning of this week after a temporary surge of optimism regarding the temporary truce between the United States and China. And although the parties made concessions to each other, the resolution of the global crisis is still a long way off. In addition, Trump fell under a barrage of criticism from the Democrats - according to them, the American president created a global crisis in his own way, provoking a trade war with China, and now can not cope with the consequences of his steps. Dollar bulls were not inspired by the completion of the first phase of the negotiation process. Obviously, the most complex and fundamental issues of a strategic nature will be discussed in the framework of the second stage of negotiations. And given the upcoming US presidential election (November 2020) and Trump's stable rating gap from Joe Biden, it can be assumed that the Chinese will not rush to conclude a deliberately disadvantageous agreement.

Such prospects put background pressure on the dollar, especially in light of the dual position of the Federal Reserve. Jerome Powell at the December meeting made it clear that in general, the regulator intends to pause the process of lowering the interest rate, but "if necessary" is ready to return to this issue. In this context, today's manufacturing PMI in the US put additional pressure on the greenback, as it ended up in the red zone (weak growth to 52.5 points).

analytics5df818403d056.jpg

Given the current reaction of the dollar to this release, it can be assumed that the indicator of production in the US processing industry (release scheduled for tomorrow, December 17) will provoke no less volatility. For two months (September and October), the indicator was in the negative area, but this time, analysts are optimistic - according to general expectations, in November it will recover to 0.8%. If the indicator remains in the negative zone, the EUR/USD pair will get another reason for its correctional growth to the nearest resistance level of 1.1200 (the upper line of the Bollinger Bands indicator on the weekly chart).

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

EUR/USD. December 16. Results of the day. Optimistic forecasts for eurozone business activity did not materialize

4-hour timeframe

analytics5df81137bbb1a.png

Amplitude of the last 5 days (high-low): 25p - 35p - 75p - 51p - 93p.

Average volatility over the past 5 days: 56p (average).

On Monday, December 16, the EUR/USD currency pair moved all day according to one logic that it understood. Most likely, from the very opening of the market, traders began to adjust against the correction of the euro/dollar pair's growth from last Friday. The fundamental background left much to be desired from the very beginning. Now we mean both the long-term fundamental background and the short-term one. Several reports from the European Union on business activity again disappointed investors, but instead of selling the euro, we saw cautious purchases. In principle, the situation remained the same until the US trading session, at which similar business activity indices in the US were published, which, unlike European ones, showed an increase compared to the previous month. And only at this moment traders began to get rid of the euro and buy the US dollar. It is difficult to say how long the downward movement of the pair will continue. The general fundamental background is not in favor of the euro, the short-term background also, but the upward trend remains from a technical point of view. But consider all the factors in more detail.

We still believe that only optimists can count on long-term growth of the European currency. If we list absolutely all the factors that affect the exchange rate of any currency, it will become clear that not a single one speaks in favor of the euro's further growth. We list the most basic factors that favor the fall of the euro/dollar pair:

1) Monetary policy in the United States remains much stronger (hawkish) than in the European Union.

2) The Federal Reserve announced a pause in easing monetary policy. The ECB and Christine Lagarde have announced the weakness of the EU economy and the need to stimulate it, which could cause a new decrease in the already negative rates.

3) A quantitative easing program is in place in the eurozone, but not in the United States.

4) Macroeconomic statistics in the US are much stronger than in the eurozone.

5) Macroeconomic reports in the United States have again begun to show growth in recent weeks, strengthening, in the eurozone - continues to decline further.

6) In the near future, the European Union may lose Britain (more precisely, lose it with a probability of 99%).

7) The trade wars fueled by Donald Trump have no less impact on the EU economy than on the US economy.

These are just those fundamental factors that came to mind without much thought. What about today? Today, preliminary values of business activity indices in the services and manufacturing sectors of the US, Germany and the European Union were published. In Germany, everything is bad and getting worse. Instead of projected growth to 44.5, business activity in the manufacturing sector decreased to 43.4. In the service sector - there is an increase from 51.7 to 52.0, but it is not so important due to the fact that this is not the most problematic area in the German economy, and it did not cause serious concern before. The composite index remained unchanged at 49.4 (an increase of 49.9 was forecasted). In the European Union. The business activity index in the manufacturing sector decreased to 45.9, in the service sector - rose to 52.4, the composite index - remained unchanged - 50.6. As you can see, in the locomotive country, the European economy and, in fact, in the European Union, the patterns of business activity are almost identical, and both suggest another deterioration in the state of the manufacturing sector. Needless to say, that it is the manufacturing sector that affects GDP, inflation, wages, that is, in fact, pulls all other macroeconomic indicators down (or up)? What should traders expect from future macroeconomic publications in December (or December) if business activity worsens again? How can the euro be in demand among traders with such a fundamental background? But maybe the situation is no better in the US?

The situation is much better in America. The ISM business activity index has not been published today, which is considered more important than Markit, and is also located in the red zone. We learn it only from the final release, that is, at the end of the month. But according to preliminary values of Markit business activity indices, we can already say that there is a slight decrease of only 0.1 in the manufacturing sector. An increase of up to 52.2 in the services sector. As a result, the composite index of business activity has grown to 52.2. Thus, even though the ISM index is much lower than the Markit indices, at the moment we can state a good state of business activity in all areas of the US and a depressing state of business activity in the EU manufacturing sector.

From a technical point of view, the pair continues to be located above the critical line, therefore, the upward trend continues. Although in the near future quotes of the pair may again leave the bottom of the Kijun-sen line.

Trading recommendations:

EUR/USD is trying to resume the upward movement. Thus, long positions formally remain relevant with targets at the resistance level of 1.1183 and 1.1196, but we recommend that it be wary of opening long positions. It will be possible to sell the euro/dollar pair after overcoming the Kijun-sen line, but in small lots, with goals 1.1071 and Senkou Span B 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

Results of the day from 12/16/2019

The market ignored preliminary data on business activity indices both in the eurozone and in the United States, although they were quite curious. So now we can only hope that tomorrow's data on the labor market in the UK, as well as industry in the United States, will be able to make investors remember such a strange thing as macroeconomic statistics.

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

Adventures of the pound continue, UK elections have passed, but the Brexit saga does not end there

analytics5df81b73dce35.jpg

As a result of early elections in the UK on December 12, the Conservative Party, led by Boris Johnson, has won the most parliamentary seats since 1987, that is, from the time of Margaret Thatcher's premiership.

The Tories received 364 seats in the House of Commons, which consists of 650 people

At the same time, the Labour Party suffered the most crushing defeat since 1935. It got only 203 places.

The latter fact was one of the biggest surprises of the last election.

According to Andrew Neal, a BBC columnist, this is the third largest political shift in the United Kingdom after the victory of the Labour Party led by Clement Attlee (in 1945) and Victoria Tory under M. Thatcher (in 1979).

What is the secret of Tory success?

Apparently, Johnson's risky bet worked.

Recall, at the end of October, he said that an extraordinary universal vote is Great Britain's only way out from the impasse associated with Brexit.

The campaign was dedicated to Brexit.

The Tories promised voters that they would easily lead the country out of the European Union.

The Labour Party argued that Britain should maintain close ties with the EU.

Between these contrasting "hard" and "soft" options for the United Kingdom to leave the EU, voters seem to have preferred the former because they are just tired of the Brexit theme and want to get it over with. Under this scenario, the election campaign of the Laborites under the slogan of continuing negotiations on Brexit with the EU and holding another referendum was a failure.

What will happen next?

Throughout 2019, both under Theresa May and Johnson, the Conservatives did not have a majority in Parliament to ratify the "divorce" agreement.

Now, Johnson has the necessary majority, so Brexit, it seems, still take place.

However, the agreement on the country's withdrawal from the EU is only the beginning: then London will need to quickly agree on a trade deal with Brussels and save the slowing economy.

Another result of the elections was the confident victory of the Scottish Nationalist Party (SNP) in Scotland. SNP led by leader Nicola Sturgeon will seek another Scottish independence referendum, creating a new headache for London.

As noted by Robert Shrimsley of the Financial Times, despite all the successes, Johnson should prepare for new challenges - trade negotiations with the EU and the Scottish independence campaign.

What to expect from the pound?

During the election campaign, the British currency grew when the chances for the Conservatives to win increased, and fell at any hint that Labour, led by Jeremy Corbyn, could prevail.

According to some experts, the position of market participants was, albeit logical, but not entirely clear.

The election program of the Labour Party implied the implementation of many scenarios that aroused concern among investors. For example, Corbyn advocated the nationalization of public utilities. At the same time, he would hardly have been able to translate these plans into practice, since not a single poll even indicated that Labour could come to power without the support of centrist pro-European parties. This ruling coalition could have implemented a very soft Brexit or canceled the country's exit from the EU, that is, it would actually have done what most investors are likely to consider to be good for the British economy.

The divorce agreement promoted by Johnson, which he had previously concluded with Brussels, implies the possibility of raising more impressive trade barriers between the EU and the United Kingdom.

At the election results, indicating the Conservative Party's unconditional victory, the pound rose against the US dollar to its highest value since May 2018, and against the euro to the highest level since the Brexit referendum in 2016.

"There are not many reasons for the further growth of sterling," State Street Global Markets strategists said, who see a fair value of GBP at $1.3340 against the US dollar and €0.8670 against the euro.

"Over time, these fair values can move towards 1.36 and 0.84, respectively, although this seems unlikely, given that we remain in a post-election environment where a more hard version of Brexit is possible," they said.

"Sterling has less room for growth against the euro than the dollar after the Conservative Party wins the general election in the UK," Societe Generale said.

"Negotiations on trade deals that will begin if the British Parliament accepts an agreement by Conservatives to leave the EU will create a lot of uncertainty. In addition, the problems of the economy will not disappear. The euro will be less prone to Brexit concerns due to reduced trade, but this will be offset by the economic weakness of the eurozone," experts said. They expect the EUR/GBP to trade between 0.82 and 0.88 in 2020.

According to analysts at Nordea Bank, the pound may face a risk of decline after the British Brexit deal is ratified and the UK officially leaves the EU on January 31.

"The fact is that after that more complicated trade negotiations with the EU will begin," they said.

According to the bank's forecast, the EUR/GBP pair will trade at 0.835 in a month, 0.85 in three months and 0.87 in six months.

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

EURUSD and GBPUSD: Gloomy ending of the year for the eurozone manufacturing sector. UK business activity declines

Problems in the manufacturing sector of the eurozone persist, while the dynamics of the service sector again began to show positive growth. A significant gap between sectors continues to widen, but so far there are no signs that the reduction in the production sector is gradually affecting the services sector. It should be noted that the risk of aggravation of the situation after the elections in the UK and the agreement reached by the US and China, which I described in more detail in my morning review, is also reduced.

analytics5df814517a05a.jpg

Let me remind you that China and the United States managed to find a common language and agree on mutual concessions within the framework of the first phase of the trade agreement between the two countries. At the end of last week, U.S. President Donald Trump announced the upcoming reduction of duties to 7.5% for some goods from China, and canceled the new duties scheduled for December 15, this was done after China, as part of the agreement, agreed to huge acquisitions agricultural products and a number of other energy products.

Returning to the report on the manufacturing sector, it is worth noting that the sector weighed on deep into the recession, and some signs of recovery that could be observed at the end of this summer did not make it possible for manufacturers to maintain a similar pace by the end of this year. Now we can safely say that the eurozone economy is ending 2019 in difficult conditions, and, given the gloomy prospects for the next year and the high probability of a further reduction in rates, this does not bode well for buyers of risky assets.

analytics5df814653ed11.png

As I noted above, the preliminary index of PMI for the manufacturing sector of the eurozone fell to 45.9 points in December this year, remaining below 50 points, indicating a decrease. On the contrary, the forecast was an increase in the index to the level of 47.3 points. As for the service sector, here the preliminary index of PMI showed positive dynamics and grew to 52.4 points in December against 51.9 points in November with a forecast of 52.0 points.

analytics5df8148df1e24.png

The composite index remained unchanged at the level of 50.6 points in December against the same indicator in November of this year.

Given the low market volatility, the technical picture in the EURUSD pair has not changed. The upward trend is gradually slowing, and the growth of risky assets caused by the election results in the UK, gradually came to naught. At the moment, the bears will strive to push the trading instrument below the support of 1.1110, which will lead to the lows of 1.1070 and 1.1040. With an upward correction, which may continue after a report on manufacturing activity in the US, problems for euro buyers may begin in the resistance area of 1.1160. Larger players will prefer the 1.1200 level, which is a kind of psychological mark. Its breakthrough will lead to the continuation of the upward trend of the European currency.

GBPUSD

The British pound, apparently, will gradually be stuck in a narrow side channel, and a breakthrough of resistance at 1.3530 will occur only after the situation with Brexit has been clarified. The pound experienced pressure after today's preliminary report, which indicated a decrease in activity in the country's manufacturing and services sectors.

analytics5df814a16fa9a.png

It is important to note that the composite index fell to its lowest level since 2016.

According to the data, the preliminary PMI for the services sector fell to 49.0 points in December 2019, after a slight increase to 49.3 points in November of this year. The manufacturing PMI also dropped, but even more, to 47.4 points from 48.9 points in November. As a result, the composite index fell to 48.5 points against 49.3 points in November. Values below 50 indicate a decrease in activity.

The decline in activity in two areas was directly related to the political uncertainty within the country, as well as to the lack of clarity about Brexit, which remains today. Weak global growth is also one of the reasons for the decline in sectors.

As for the technical picture of the GBPUSD pair, then, most likely, the pound will gradually lock in the side channel, and volatility will decrease. Strong support at 1.3320 and resistance at 1.3415 will be the main reference points for buyers and sellers. Going below 1.3320 will quickly push the trading instrument to the lows of 1.3260 and 1.3200. A break above the resistance of 1.3415 will lead to an update of the monthly high at 1.3520.

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