Forex basics and my trading with FBS

[SebsCubs]

Market updates on November 26

26.11.2019

The euro is in the sideways movement currently. On the H1 chart of EURUSD, the support level of 1.1004 formed on Monday has been approached this morning. However, the Parabolic SAR indicates there is a potential for the upwards move. In this case, the resistance levels of 1.1020 and 1.1029 may be placed for the bulls. An additional support level may be located at 1.0988 for the bearish scenario.

The US dollar shows a potential for a decline against the Japanese yen. On the H1 chart of USDJPY, the Parabolic SAR is indicating a recently started bearish trend. The RSI has crossed the 70% upside-down at the same moment when the price bounced down from the upper line of the Bollinger Band. If the bearish move continues, it will have the support levels of 108.91 and 108.84 on its way. Otherwise, the resistance levels may be placed at 108.99 and 109.08

NZDCAD has been trading at the resistance level of 0.8547, reached this morning. The Stochastic Indicator shows the fast line crossing the slow one upside-down within the overbought zone. This means the price is very likely to continue dropping. For this scenario, the support levels of 0.8526 and 0.8510 may be placed. For the bulls, an additional resistance level may be located at 0.8563.

 

[SebsCubs]

5 important events this week will bring us!

02.12.2019

RBA rate statement (Tue, 5:30 MT time (3:30 GMT)) – The interest rate is expected to remain unchanged at 0.75%. Traders need to pay attention to the tone of the statement, as the regulator may provide hints on the possible changes to the interest rate in future. If the RBA forecasts a slash of the interest rate to the downside, the AUD will weaken.

Canadian balance of trade (Wed, 15:30 MT time (13:30 GMT)) – According to the forecasts, the deficit of the balance will shorten to -0.7 billion CAD. Higher figures will boost the Canadian dollar.

US balance of trade (Wed, 15:30 MT time (13:30 GMT)) – The deficit of trade for the United States is expected to get lower to -$49 billion. If the actual level is higher, the USD will rise.

Canadian job data (Fri, 15:30 MT time (13:30 GMT)) – Analysts anticipate the unemployment rate to increase to 5.6%. Also, the employment change will be released, although the forecasts have not been announced yet. A higher-than-expected employment change and lower-than-expected unemployment rate will support the US dollar.

American job data (Fri, 15:30 MT time (13:30 GMT)) – The US will release NFP alongside with average hourly earnings and unemployment rate. Experts anticipate the number of payrolls to advance by 180 thousand jobs, while average hourly earnings are expected to increase by 0.3% and the unemployment rate is forecast to remain at the same level of 3.6%.

Hot news:

The improvement of the Chinese manufacturing PMI (51.8 vs. 51.5 expected) during the Asian trading session boosted the risk sentiment in the market and pushed the risk-weighted assets up.

After the biggest Friday’s loss, the oil prices rebounded as Iraq announced deeper oil cuts ahead of the OPEC+ meeting on Thursday.

A fresh report on the US-China trade deal expects US President Donald Trump to hold off the implementation of tariffs on December 15. At the same time, it does not expect the deal to be reached this year.

 

[SebsCubs]

Market updates on December 3

03.12.2019

You will never get bored in the anticipation of the US-China trade deal, as the sides have something to surprise the market all the time. While the major currency pairs have taken advantage of the weak USD, Trump has got something to make us worry. According to his comments, the US-China trade deal may come after the next year’s election. Together with the fresh tariffs against Brazil and France, these announcements will likely determine the market situation now. Pay attention to the risk-weighted currency pairs.

The Australian dollar has strengthened after the RBA kept its interest rate on hold at 0.75%. On H4, AUD/USD broke the 200-period SMA and rose higher to the November resistance levels. The bullish momentum is supported by the weaker USD, too. Upside targets for the pair lie at 0.6863 and 0.6872. However, judging by Stochastic and RSI oscillators, a reversal is likely to happen soon. Stochastic oscillator formed a crossover in the overbought zone, while RSI is moving within this zone. As soon as it crosses the 70th level upside down, it may provide us a selling opportunity. From the downside, the support levels lie at 0.6836 and 0.6825.

The kiwi is demonstrating a strong performance, too. NZD/USD is trading at the early August levels and targeting the resistance at 0.6543 on the 4-hour chart. Bulls may try to break this level and target the next resistance at 0.6561. At the same time, the Stochastic and RSI oscillators are overbought here. While RSI is looking down, a stochastic oscillator formed a crossover above 80. That is why we may expect a correction to the 0.6519 level. If this level is broken, the next support will lie at 0.6504.

USD/JPY has fallen on the comments by the US President Donald Trump. On H4, the pair has been testing the support at 108.82 (200-period SMA). If the downward momentum continues, the next support will be placed at 108.65. From the upside, keep an eye on the 109.04 and 109.2 levels.

 

[SebsCubs]

Currency market updates on December 4

04.12.2019

Wednesday marks the middle of the trading week. Below you will find the useful information for successful trading.
Key events ahead

American ADP Non-Farm Employment change – 15:15 MT time (13:15 GMT)
Bank of Canada Rate Statement – 17:00 MT time (15:00 GMT)
American ISM Non-manufacturing PMI – 17:00 MT time (15:00 GMT)

EUR/USD is preparing for a decisive move

EUR/USD rose above 1.1070 on Monday and has been consolidating under the resistance level of 1.1090 since then. On the H1, Bollinger bands compressed. This confirms that the market is gathering power to make a more decisive move in the nearest future. The resistance level of 1.1090 has been capping the upward movement of the price since the beginning of November and may require extra effort from the bulls to break. However, the Stochastic Indicator’s fast line already crossed the slow one bottom-up within the oversold zone. This may signal a good moment to open longs. Otherwise, if the support level of 1.1070 is broken later, the price may go down to the support levels of 1.1005 and 1.0990, where it has been trading during the last week of November.

GBP/USD under pressure down

Yesterday, the British pound rose to the resistance level of 1.3008 against the US dollar. On the H4 chart of GBP/USD, since May 2019 this level was reached only on November 21. Today, the price is more likely to decline as the RSI and Stochastic are in the overbought zone and will likely leave it soon. Once the support level of 1.2990 is crossed, the next target for the bears may be located at 1.2926. Otherwise, an additional resistance level to check the bullish move may be placed at 1.3000, being a strong psychological barrier to break.

More concerns about the trade war affecting USD/JPY

US President Donald Trump announced a trade deal with China might not come until after the 2020 US presidential election. This got traders worried. The demand for the safe-haven Japanese yen rose pulling USD/JPY down.

On the H4 chart, the RSI, MACD, and Stochastic Indicators are all reporting the oversold state of the market. Indeed, the price has dropped to 108.50 yesterday and has been in a sideways movement since then. Very likely, it is preparing for a correction. An intermediary resistance level to check that may be located at 108.78 with the next one at 109.20. Otherwise, the support may be placed at 108.30.

Bank of Canada announces the interest rate

Today, the Bank of Canada will announce the interest rate. During the previous session, it was decided to keep it at 1.75%, the highest level since 2008. The policymakers did not express any inclination to change it. However, the governor Mr. Poloz commented that they would observe how well the dynamics of the Canadian economy perform within the context of the global slowdown. Hence, the steady rate signalling the resilience of the Canadian economy may boost the Canadian dollar.

 

[SebsCubs]

Currency market on December 5

05.12.2019

Thursday's start has been quite eventful. The great pound's surge has been highlighting the day, while oil traders are cautiously awaiting the OPEC meeting. Read more about the main market movers below.
Disappointing economic data pulled the AUD down

While the level of retail sales showed a slowdown versus the expected advance by 0.3%, the Australian exports declined from 6.49 to 4.5 billion AUD. On H4, the Australian dollar has kicked off the resistance at 0.6848 and fell below the 200-period MA to the 0.6831 level. The price is trying to form the “Double top” pattern with the neckline at 0.6821. As soon as this level is broken, bears will be ready to move the aussie towards the lower target at 0.6810. The upside momentum is limited by the 0.6848 and 0.6855 levels.

The British pound has continued its bullish momentum

Today we’ve already explained what is going on with the British pound. You can read more about it here. On H4, GBP/USD continues to move up to May’s peak at 1.3170. If bulls manage to successfully break this level, the next resistance will be placed at 1.3220. In case of the reversal, watch at the supports at 1.3082 and 1.3050.

USD/MXN: More downside is possible

USD/MXN took advantage of the weak USD. On the 4-hour chart, the pair slid below the 50-period MA yesterday. Today, it has already tested the 100-period MA, which serves as strong support at 19.4270. In case of a breakout, we may expect further fall towards the 19.36 level. However, a stochastic oscillator formed a crossover in the oversold zone and RSI is looking up. That is why we may expect a short-term correction to 19.48 and 19.53.

 

[SebsCubs]

Currency market on December 6: the NFP Friday

06.12.2019


Important events today: all around the USD

We can say that today is a Black Friday for currency markets – the American Non-Farm Payrolls are out. Although that is going to be the major market mover today, it is not the only one. Some more details are below.

American Non-Farm Payrolls, unemployment rate, and average hourly earnings are out at 15:30 MT time (13:30 GMT) – be careful with the volatility of USD and related currencies around the data release time

Canadian jobs data - 15:30 MT time (13:30 GMT)

OPEC will be concluding its round of discussions and meetings today

EUR/USD starts the day on a positive note

The price of EUR/USD has started this day by reconfirming the level of 1.1104 that it reached on Wednesday. It was a breakthrough of the month as the currency pair has never been that high since the first week of November. On the H4, the pair trades above the 200-period, 100-period and 50-period Moving Averages, which is another sign that there is a stronger bullish momentum than before. However, we still have to see how strong it is, and the resistance of 1.1130 may be a good level to check that. Today, a major factor influencing that will be the volatility of the USD in the context of relatively strong market expectations from the US Labor Authorities for the Non-Farm Payrolls and related data they are about to release.

USD/CAD waiting for the news

It is safe to assume that the consolidation of USD/CAD at the resistance level of 1.3185 reached on Thursday is a preparation for a more decisive move. There are some preliminary signs of a coming bullish trend to continue the correction after the serious drop at the beginning of the week. The Awesome Oscillator reached the low yesterday and reverted upwards signaling the general upward direction of the price. However, the next step will be defined by the release of the Non-Farm Payrolls due today from the US side and the jobs data due at the same time from the Canadian side. Therefore, watch the news and be careful with the coming price volatility.

USD against JPY and CHF

Against the Japanese yen and the Swiss franc, the American dollar shows similar patterns during the last two weeks. Both currency pairs dropped significantly on December 2-3, below the 200-period, 100-period, and 50-period MAs, and both are showing a mild correction since then, having bounced down on Thursday from the local resistance levels corresponding to each one. Although the internal and external contexts for the Swiss and the Japanese currencies are different, the common factors such as the Non-Farm Payrolls moving the USD will affect both in a similar way once again. That effect may be reinforced by the fact that both currencies are safe-haven and gain strength when the market feels uncertainty about the American dollar.

 

[SebsCubs]

5 important events this week will bring us

09.12.2019

The second half of this week is going to be well loaded with big events. All major currencies will be affected, for this reason, brace yourselves and prepare for some price action.
Main events

British monthly GDP growth rate (Tue, 11:30 MT time (09:30 GMT))The last two indicators of the monthly GDP growth rate have been at -0.1%. If the monthly GDP growth for October is better than the expected 0.1%, it will make the British pound rise.

Federal Funds Rate (Wed, 21:00 MT time (19:00 GMT)) The American financial authorities will announce the interest rate and release the monetary policy statement. They will also give the economic projections for the nearest future and explain the main issues behind the chosen monetary stance. Steady rate (currently at 1.75%) and positive perspectives will support the US dollar.

The British Parliament elections (Thu, all day)Finally, we will see the resolution of the months-long parliamentary debates and clarification of the coming course of development in Great Britain. Definitely, it is going to be a hard day for the British pound, but the victory of Boris Johnson would boost it.

ECB Main Refinancing Rate and Press Conference (Thu, 15:30 MT time (13:30 GMT))The European Central Bank will announce the interest rate, to which no change is expected (currently at 0%); more importantly, the ECB head Christine Lagarde will give a press conference, which will reveal the economic outlook of the euro area and the intentions of the monetary policy makers. A positive tone of the speech will strengthen the euro.

American monthly retails sales (Fri, 15:30 MT time (13:30 GMT))Although not a major indicator, still the retail sales give a very representative outlook on consumer sentiment. If the picture is more positive than the market expectation, the US dollar will rise.

Background tension

Strong jobs data provided by the Non-Farm Payrolls on December 6 boosted the US dollar. However, the upward movement of the US dollar does not gain full power as there still are serious concerns among the investors on the next stage of the US-China trade war. The deadline of December 15 for imposing new tariffs on the Chinese goods by the US is still in place, while the last comment from the US President Donald Trump was that he liked where the negotiations were going. This means that tensions will keep the market’s optimism in check until next Monday at the very least.

 

[SebsCubs]

Currency market on December 10

10.12.2019

Clouds are gathering

Today is expected to be a relatively quiet day in terms of economic announcements. The big events start on Wednesday, while at the background the December 15 deadline for imposing new tariffs by the US on the Chinese goods will keep the market dynamics warmed up through the rest of the week. Such a layout represents a future sentiment among many within the financial circles: nothing really disastrous, but a general outlook of uncertainty, misbalance, and slowdown. Essentially, these are the reasons why Goldman Sachs analysts predict the price of gold to rise in 2020.

More specifically, they say it may soar up to $1600, which actually is quite a worrying prediction. The last time gold was in that area were the years 2011-2013, which means crisis and post-crisis period. And the level itself is substantially far away from the current area of $1470 per troy ounce. However, the upward trend is visible since 2016, and it seems that even without any major disappointments in the global economic environment the market would gradually get to the heights of $1600.


Nevertheless, below are some of the noteworthy events of regional impact, which may become the market movers to a certain extent today.

British Balance of Trade (11:30 MT time (09:30 GMT))

German ZEW Economic Sentiment Index (12:00 MT time (10:00 GMT))

You can have a closer look at these events in the economic calendar.
Clear picture for the euro

Since August this year, the euro has been dropping against the British pound and has not made an exception recently. In fact, it may find more reasons to continue the same direction. The pre-election polls show that the Conservative party of Boris Johnson is gaining strength, which in turn supports the GBP. While the questions about the bond purchasing program within the quantitative easing by the ECB keep rising, not leaving much space for positive expectations on the coming press-conference by Christine Lagarde. Altogether, this weakens the EUR/GBP pair. Technically, it is expected to keep falling in any case in the long-term. In the mid-term, however, we may see a surge up to the levels of the 50-period and 100-period Moving Average, to which it came every time before dropping further during the last three weeks. Today, although a recoil up to the resistance of 0.8455 is still a possible scenario, more probably the price will crawl a little further up and then drop. On the H4, we already see that the level of 0.8400 was touched during the trading process previously, and the price is consolidating along the current level in a sideways movement. So watch out for a minor local upswing followed by the continuation of the downtrend.

US news come first

Against the US dollar, the euro has been rising since the end of November, even despite the strong NFP data released by US labor authorities on December 6. On the H1, this marked trend is visible and currently coincides with the 200-period moving average, supporting the price movement. It would be tempting to assume that the price would continue the same direction. However, we have to take into account the news coming. On Wednesday, the Fed will announce the interest rate and give a press conference. That is, after a positive NFP data, showing the resilience of the US economy. On Thursday, the European Central Bank will do the same for the Eurozone, but the expectations are hardly positive. Therefore, it will be safer to price-in the downward reversal later on. But for now, the resistance of 1.1078 is a feasible target for the price to reach.

 

[SebsCubs]

Opinion polls cast a shadow on the GBP

11.12.2019

YouGov, the key organization tracking the UK public opinion has released its final report ahead of the vote that will take place on Thursday, December 12. The news made the pound weaken versus most major currencies. Learn more!
Why is it important?

There are three scenarios of the election outcome, which are expected to affect the Brexit process and the GBP as well.

The first one is the victory of the Conservative party. As you may know, this is the party led by Boris Johnson. Analysts expect this scenario to provide certainty in Brexit, and, therefore, to push the GBP up.

The second scenario is a hung Parliament. In that case, the party with most of the votes will form the minority government. At the same time, as the seats will also be taken by the opposition Labour party, the UK will face the risks of having another Brexit deadlock. As a result, the GBP will go down.

Finally, the third scenario is the leadership of Jeremy Corbyn's Labour party. The opposition leader criticizes the inability of the Conservatives to suggest any clear solution over Brexit and plans a second referendum. No surprise for this outcome to be Brexit-negative.
What do the polls say?

According to YouGov, the Tories (the Conservative party) majority has been shrinking. The final poll shows 43% for the Conservatives and 34% for the Labour. These figures increase the possibility of a hung parliament.
How did the GBP react?

The British pound dropped on the news with the wave of panic selling. The 1.32 cliff appeared to be too tough for GBP/USD and the pair has slid to the 1.31 support level.

 

[SebsCubs]

Top 4 trading opportunities of December 12

12.12.2019

GBP: the room for surprises

It’s an election day in the UK. Traders will watch exit polls. The results will start arriving after 00:30 MT rime on Friday. The results of the vote will become clear by 4:00-5:00 MT time.

The latest opinion polls showed that the Conservative Party has a small majority. This means that the risk of a hung parliament is substantial and the fate of the GBP is hanging in the balance.

In the meantime, Boris Johnson, Prime Minister and the leader of the Conservatives, was in no mood to talk: he hid in an industrial fridge to avoid journalists’ questions.
EUR: mildly negative risks ahead of the ECB

The first meeting of Christine Lagarde as the President of the European Central Bank. Analysts at UBS expect that she will deal with the divided Government Council and won’t initiate any new policy action. Still, the Lagarde may try to make the news. She may comment on the policy tools available to the central bank. In addition, the ECB may lower growth and inflation forecasts for the euro area.
USD: it’s not so bad

Yesterday, the Federal Reserve kept its interest rate unchanged at a 1.5%-2% range during its meeting. What is more important is that the Fed’s dot plot indicated the federal funds rate at 1.6% in 2020, without any changes. You can read more about the outcome of the meeting here.
Trump’s meeting is ahead

Today, US President Donald Trump plans to meet the top trade advisers to discuss tariffs on China. The meeting will be crucial ahead of the tariffs deadline on December 15. According to an anonymous source, the US administration will raise tariffs on Sunday, but the final word will still belong to Trump. The fresh tariffs will increase uncertainties in the process of the US-China trade deal and be hurtful for the risk-weighted assets, such as the AUD, the NZD, and stocks.
What else happens in the market?

Follow the news and our social networks: Telegram and Facebook to stay up to date with the changes!

 

[SebsCubs]

Victorious Boris Johnson

13.12.2019

Conservatives win

Finally, the victory of the Сonservative party under the leadership of Boris Johnson is confirmed. They have a 43.6% majority, while the Labour party follows with 32.4% and the Liberal Democrats got 11.4%.

The consequences?

Boris Johnson had previously commented he had a strong agenda for the United Kingdom should he win the election. One of the pillars of his plan was to “get Brexit done” at the soonest and in the best interest of the UK.

For the UK, it means higher stability and a better economic outlook with all the consequences.

For the world, it means stronger GBP against the related currencies.

All of that, of course, takes place if Mr. Johnson does not fail on his intentions.

GBP celebrating the victory

In the meantime, the British pound reacted immediately to the victory of Boris Johnson.


On the weekly chart, it is visible that the price of GBP/USD rose to the area of 1.35 – a height it has never been to since May 2018. And it is testing the August-2018-December-2019 resistance currently. Crossing this barrier would confirm the market’s intention to go even higher.


In the short term, however, we are expecting a certain correction downwards, as confirmed by the Awesome Oscillator. In any case, whether it is going further upwards now or later, the price would need to make a stop at the resistance it is testing now. On the hourly chart, the level of 1.3500 is going to be capping the bullish direction for a while, while 1.3450 will be the support. Crossing the support would mean a deeper correction downwards. Otherwise, we will observe a more sideways movement of the price.

Watch the news and stay informed!

 

[SebsCubs]

Important events this week will bring us

16.12.2019

Time to cool down

Last Friday has brought us some good news – the phase-one trade deal between the US and China was sealed. Although the official ceremony of signing the text and shaking hands will take place in January, both sides already confirmed to the public that the step is taken.

According to the deal, the US commits to reducing certain tariffs and expanding tariffs exemption for the Chinese goods, while China commits to purchasing more of the US goods, with the focus on the farm industry. Apart from a few specifics like an advancement in regulating intellectual property rights, there was little more detail provided on the deal struck.

Hence, although the announced content of the deal made a lot of analysts highly skeptical about the actual positive effect the agreement brings, at least we have some confirmation that things are not going worse in the observable future. As the old proverb says, a weak peace is better than a strong war.
A quiet week ahead

As the US-China deal announcement, the ECB monetary press conference and the UK parliamentary elections all took place last week, this week has little to offer in comparison. Nevertheless, below are some of the noteworthy events you may be interested to watch out for.
Monday of PMIs

Today, the industrial expansion indicators will be announced by France (10:15 MT time(08:15 GMT)), Germany (10:30 MT time(08:30 GMT)), the UK (11:30 TM time (09:30 GMT)) and the US (16:45 MT time (14:45 GMT)). Although not a primary indicator like the GDP, the PMI is also an important evaluation of country’s economy and may have an effect on the respective currencies depending on how the actual indicator stands against the market expectation.
Australia

On Tuesday, Australian financial authorities will publish the monetary policy meeting minutes at 02:30 TM time (00:30 GMT). It will provide details of the last monetary policy meeting and the reasons behind keeping the country interest rate at 0.75%. More importantly, it will provide a sense of the economic outlook and the directions to look at in the future. In addition to that, Thursday will be the day when the country employment change and unemployment rates are announced (02:30 MT time (00:30 GMT)). Therefore, by the end of the week, we will have a more or less complete economic picture of how Australia is closing this year. A positive impression from the releases should strengthen the Australian dollar.
Inflation

A central indicator of economic and money mass expansion, the inflation rate will be announced by the UK and Canada on Wednesday at 11:30 MT time (09:30 GMT) and 15:30 MT time (13:30 GMT) respectively, and by Japan on Friday at 01:30 MT time (23:30 GMT).

 

[SebsCubs]

After election effects on the BOE

17.12.2019

The Bank of England will conduct a meeting and release a monetary policy summary at 14:00 MT time on December 19.

The monetary policy summary is published every month, which helps to keep investors updated with the current economic situation. The summary contains the votes on the interest rate, forecasts, and other policy measures. During the previous meeting, the votes for the rate changes split unexpectedly, as two out of nine members of the bank's monetary policy committee supported a cut of the interest rate. Let's see if the result of the UK general election affects the BOE decision this time.

IF the BOE is optimistic, the GBP will rise;

If the BOE is pessimistic, the GBP will fall.

 

[SebsCubs]

Did Trump impeachment affect the currency market?

19.12.2019

Good Thursday, world! We’ve got plenty of news and important releases since yesterday. Did they have a major impact on the market, though? Let’s see.
Tough time for the US presidency?

During yesterday’s American trading session, the US House of Representatives voted to impeach US President Donald Trump. Trump was charged with abusing of power. That decision made him the third US president in US history to be impeached. However, the support of impeachment in the House does not immediately remove the 45th US president from the office, as the final word still belongs to the Senate. As the Republicans (Donald Trump’s party) have a majority in that chamber, the vote supported by the Democrats will barely change anything.

The currency market was not affected by the impeachment process with no effect on the USD.
Australian labor market gets stronger

During the Asian trading session, the Australian dollar was boosted by the release of Australia’s job data. The employment change showed a solid growth by 39.9K (vs. 14.5K expected), and the unemployment rate declined from 5.3% to 5.2%. AUD/USD has risen by around 35 pips since the start of the day.
Bank of Japan: no hurry needed

The Bank of Japan kept its interest rate unchanged at -0.1% during today’s meeting. The BOJ Governor Haruhiko Kuroda expressed the positive views on the economy but noted that the global uncertainties remain. The bank will continue monetary policy easing until the economic conditions get better.
What is ahead

The main focus will be on the Bank of England monetary policy summary at 14:00 MT. It would be interesting to hear the comments by Governor Mark Carney after the election is over. Follow the news and stay updated.

 

[SebsCubs]

The undone victory for the GBP

18.12.2019

Yesterday, we were fearing that a strict Brexit deadline announced by the UK PM Boris Johnson and other ministers may put excessive pressure downwards on the GBP in the short-term and the long-term.

Now, we see that all the gains that the GBP won on the Conservatives’ victory are undone. Moreover, the British pound seems to be preparing to continue falling against the major currencies in the observable future.

Against the euro

On the H4, the upsurge of EUR/GBP reached higher than where it dropped from on the day of the UK elections. More so, it crossed the 50-period and 100-period Moving Averages, now testing the resistance of 200-MA. The next big step would be the high of 0.8600, reached in November.

However, we see the consolidation and the slowdown of the current steep rise right at the resistance of the 200-period Moving Average. The Awesome Oscillator also shows that a high may have been reached, and the momentum for this particular upsurge has been exhausted.

Climbing further up requires additional power and most probably additional confirmation from the Conservatives side that they would not back down on their strict agenda. If such news comes in, we may witness the start of a gradual change in the overall trend. In addition, given the context of the situation and the commentaries already provided by the UK PM Mr. Johnson and his colleagues, the absence of any information disproving the rigidity of their plan may also serve as a confirmation of the looming hard Brexit. In this case, it will cause further weakening of the GBP.
Against the USD

Against the USD, the GBP has dropped to the level of 1.3100 where it started its leap on December 12, breaking through the 50-period Moving Average. On the H4, the price is currently testing the support of the 100-period MA, showing signs of consolidation. Same as in the case with the euro, it is likely that the price will stay at the current support level for a while, waiting for additional information to guide the market movement. It may show a slight movement upwards or go sideways. If it does cross the 100-period Moving Average, it would be a sign that the market indeed has little hope for the GBP in the context of hard Brexit.

Against other currencies

Most of the GBP currency pairs show a very similar dynamic, with certain variations. On the H4 of GBP/CHF, the price has crossed the 50-period, 100-period, and 200-period Moving Average on the way down. Currently, it is testing the support of 1.2813, left at the beginning of December. Crossing that line would mean the price aims at the level of 1.2680, along which it has been trading in October-November.

Outcome

The impact of the announced Brexit agenda by the Conservatives is visible at the market. Now, the question is whether it will be a short-term disappointment or a start of a larger trend change.

To answer that, we need to follow the news and keep an eye on the price movement against the mid-term and long-term thresholds.

 

[SebsCubs]

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[SebsCubs]

Will the US crude oil inventories push the USD up?

23.12.2019

The American Crude Oil inventories will be announced at 18:00 MT time on December 27.

In view of the OPEC’s last meeting and the ongoing discussions around the world oil production and prices, the American crude oil inventories are an important figure to watch out for. Although it is not a prime indicator like a total US crude oil output, still, it has an impact on the market, especially on the CAD after the USD, due to the robust energy sector of Canada connected with the US. While the USD rises on the expansion of this indicator, the influence on the CAD is inverted; decreasing American oil inventories would put the USD under pressure down and support the CAD.


If the figures are higher than expected, the USD will be supported;

If the figures are lower than expected, the USD will be under pressure down.

 

[SebsCubs]

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[SebsCubs]

Where will EUR/USD head to?

30.12.2019

Morgan Stanley forecasts EUR/USD at 1.16 at the end of March 2020, ahead of a further rise to 1.18 by the end of June 2020. According to the bank, Eurozone growth will pick up as US growth starts to slow. In addition, the euro will be supported by political factors. A 2020 resolution to Brexit should reduce economic uncertainty for the UK and its major trading partners, including the euro area.

Rabobank reminds, however, that the USD is still the only dominant currency on the global payments system and that the US economy continues to perform well relative to other major countries.” The bank foresees EUR/USD at 1.09 in a three month period and at 1.11 in nine months.

BNP Paribas is somewhere in the middle. Its analysts think that the Fed will cut its official rate twice in the first half of 2020 in reaction to a slowing economy, moderate inflation, and high uncertainty. At the same time, the ECB will also keep the accommodative policy and this won’t let the euro strengthen much against the USD. As a result, there will be little change in EUR/USD even though the euro’s fair value is quite higher than current pricing.

 

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