Weekly Technical Analysis For December 9th to 13th, 2019

A Busy Week Ahead: Watch Out For UK General Election, Fed and ECB Rate Decisions!

EUR/USD:

We got a strong US Jobs Report last Friday. The US created 260K new jobs in November, marking the biggest gain. The unemployment rate slipped to 3.5% from 3.6% and matched a 50-year low. The average wage paid to American workers rose 0.2%, to $28.29 an hour. The 12-month rate of hourly wage gains slipped to 3.1% from 3.2%. The EURUSD pair dropped to the main support level of 1.1052 after the US Non-Farm Payrolls.

In Eurozone, Gross Domestic Product rose a seasonally adjusted 0.2% in the third quarter, matching the growth of 0.2% in the previous number. Year-on-year, GDP growth in the single currency bloc rose 1.2% in the third quarter, in line with forecasts.

In the upcoming week, we will closely watch the US CPI inflation figures on Wednesday, which should lend further support to the notion that inflation has returned to the Fed’s target.

Consumer prices are expected to have risen 0.2% last month and 2.0% over the prior year, according to estimates. Excluding the cost of food and fuel, core inflation is projected to stay at 2.3% on a year-over-year basis.

Besides the inflation data, the Fed is scheduled to hold its policy meeting on Wednesday. There is no interest rate change expected from the Fed. Federal Reserve Chair Powell made clear before that there would be no further cuts to U.S. interest rates barring a major deterioration in the economy. Powell will hold a press conference following the meeting, with awaiting his insights on the policy outlook.

The ECB will announce its rate decision and forward guidance on Thursday and outgoing Christine Lagarde may announce further actions at the press conference. This week's meeting will be the first monetary policy meeting for Lagarde.

Keep your eye on the 1.1052 main support level in the EURUSD pair. As long as the price stays above 1.1052 on a daily basis, the downward movement may be limited and the resistance level can be found at 1.1114 again. On the other hand, if the price moves down 1.1052, we will see 1.1007 as the next support level

Support : 1.1052 - 1.1007 - 1.0965

Resistance : 1.1114 - 1.1165 - 1.1237

GBP/USD:

The UK is gearing up for a general election after MPs voted for a 12 December poll. The general election will effectively offer the UK another vote on how they want Brexit to proceed. The latest polls show the Conservative Party is a big lead.

The Sterling hit its highest level since May 2019 versus the US Dollar on increasing confidence that the general election on Dec. 12th will return the Conservative Party to power with a healthy majority.

Focus on the 1.3136 main support level in the GBPUSD pair. If the pair stays above 1.3136 on a four hourly basis, the main resistance level will be at 1.3231. In contrast, if the pair drops below 1.3136, the next daily support level can be found at 1.3046.

 Support:  1.3136 - 1.3046 - 1.2947

 Resistance: 1.3231 - 1.3313 - 1.3392

USD/JPY:

The USDJPY pair closed last week above the 108.52 daily support level. As long as the price stays above 108.52 on a daily basis, the fall may be limited and we will face 108.79 and 109.09 as the resistance levels again. In contrast, If the pair drops below 108.52, we will see the next support level at 108.14 

Support : 108.52 - 108.14 - 107.82

Resistance: 108.79 - 109.09 - 109.39

GOLD:

Prices of the safe-haven gold fell on Friday after strong US Non-Farm Payrolls data. If the downward movement continues below 1466, we will follow 1453 and 1440 as main support levels. On the upside, if the price rises above 1466, the next resistance level can be found at 1478.

Support: 1453 - 1440 - 1421

Resistance:  1466 - 1478 - 1492

08 Dec 19 (Sun)

07:18 pm


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