Weekly Technical Analysis For December 10th to 14th, 2018

This Week's Focus: ECB Policy Decision And US CPI

EUR/USD:

The EURUSD pair rose sharply after a disappointing US Jobs Report. The Non-Farm Payrolls rose by 155K in November, which is lower than the consensus estimate for the creation of 200K jobs. The previous month’s reading of NFP was revised to 237K. The Unemployment Rate stayed at 3.7%. Average hourly earnings advanced 0.2% month-on-month, below expectations for a 0.3% gain.

In the upcoming week, we will focus on the other major indicator of economic conditions that is US CPI Inflation. The November's customer price index is expected to come out at 2.2%, lower than the previous number of 2.5%. On the other hand, Core CPI inflation is expected to rise to 2.2% from 2.1% a month earlier. A higher than expected reading should be taken as positive for the US Dollar.

In the Eurozone, watch out for the ECB Monetary Policy Decision on Thursday. There is no rate change expected from the ECB. However, it will mark the end of an era for the ECB, which is set to formally announce the end of its three-year-long, 2.6 trillion-euro monetary stimulus scheme. The announcement will be followed by President Mario Draghi's news conference and his statements about inflation will be significant. The meeting will bring new information about the ECB's policy.

Moreover, the German Consumer Prices index is expected to stay at 2.3% in November, the same as the previous number. A higher than expected reading should be taken as positive for the Euro.

As long as the EURUSD pair sustains above the 1.1367 major support level on a daily basis, the upward movement may continue and we will see resistance levels at 1.1446 and 1.1531. In contrast, if the pair breaks down below 1.1367, the next support level will be placed at 1.1262.

Support: 1.1367 - 1.1262 - 1.1188

Resistance:  1.1446 – 1.1531 - 1.1607

GBP/USD:

The Pound was under pressure last week after Prime Minister Theresa May's government was found in contempt of parliament for refusing to release its full legal advice on Brexit.

We will focus on the UK Parliament vote on the Brexit deal. Britain's parliament is set to vote on Prime Minister Theresa May's Brexit transition deal on Tuesday, but the chances of it being approved are unlikely.

Investors also look to reports on Unemployment Rate Manufacturing and Industrial Production for an insight into the progress on UK economic growth amid fresh political uncertainty.

The GBPUSD pair dropped the daily level of 1.2712. In order for the selling pressure to gain more momentum, it needs to break down 1.2712 and stays below that level, on a daily basis. At this point,  the next support level can be found at 1.2624. On the other hand, if the price moves up above 1.2712, the key resistance level will be at 1.2844.

Support: 1.2712 - 1.2624 – 1.2494

Resistance: 1.2844 - 1.2961 - 1.3050

USD/JPY:

The USDJPY pair dropped to 112.46 key support level.  If the pair breaks down below 112.46 and stay below that level on a four hourly basis, the downward movement may continue and we will see the 111.66 a daily support level. On the other hand, if the price moves up above 112.46, the resistance level can be found at 113.63.

Support:  112.46 - 111.66 - 110.86

Resistance: 113.63 - 114.63 - 115.61

GOLD:

The GOLD Price found buyers from the 1235 key support level on hit the main level of 1249. In order for the upward movement to gain more momentum, it needs to go beyond and stay above 1249 on a four hourly basis. Otherwise, we will see 1243 as a daily support level.

Support: 1243 – 1235 – 1230

Resistance: 1249 - 1256 - 1265

09 Dec 18 (Sun)

09:39 pm


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