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GBP/USD: review of previous trading day
On December 15, the pair was moving in an upward trend. As a result, the price went above Monday's local high.
Important events in the economic calendar:
The main event yesterday was the publication of the UK labour market report. Thus, the unemployment rate increased to 4.9% from 4.8%. Economists had forecast the rate to climb to 5.1%. The indicator turned out to be not as bad as it could have been. The number of people claiming unemployment benefits climbed to 64,300. Economists had expected the reading to increase by 50,000. Employment in the United Kingdom continued to decline in October. The figures dropped by 144,000. Employment declined for the fifth time in a row.
Buyers could take advantage only of the divergence of unemployment expectations. However, it seemed that those were speculations on the expectations of a positive outcome of the Brexit trade negotiations to blame for that.
What happened on the trading chart?
At the beginning, the quote was trading in a narrow range of 1.3300/1.3350. In the second half of the day, the price increased by more than 170 pips. Consequently, from the level of 1.3444, the pair went above Mondays' high to 1.3464.
EUR/USD: review of previous trading day
The EUR/USD remained flat yesterday.
Important events in the economic calendar:
Nothing important happened in Europe on Tuesday. Meanwhile, Germany reminded of its intention to start a national lockdown from December 16. Possibly, due to the lockdown announcement, the currency pair moved in a downward trend for a while.
The United States delivered its industrial production report during the North American session. The level of the index rose to 5.5% below its pre-pandemic reading, negatively affecting the greenback.
What happened on the trading chart?
The quote was moving along the resistance area of 1.2170/1.2180. The daily activity was only 46 pips, which is considered a very low indicator in the market.
EUR/USD: trading recommendation for December 16
Today, Europe will present its preliminary business activity report. The services PMI is expected to fall to 41.5 versus 41.7. Meanwhile, the PMI in the manufacturing sector should drop to 52.9 from 53.8. As a result, the euro may incur losses.
12:00 (GMT+3) – December services and manufacturing PMI reports in euro area
In the second half of the day, the United States will deliver similar reports. The services PMI is expected to sink to 55.6 from 58.4, while the PMI in the manufacturing sector should decline to 55.0 versus 56.7. As a result, the greenback may be brought under pressure.
17:45 (GMT+3) – December services and manufacturing PMI reports in US
The main event of the day will be the FOMC meeting. The regulator is expected to keep the interest rate at the level of 0-0.25%
Market players will primarily be interested in the amount of quantitative easing and for how long the regulator will keep its current monetary policy.
The expansion of quantitative easing is considered to be bad for a national currency.
The quote is still moving in the area of the medium-term uptrend peak. The euro is likely to rise to 1.2250 if one takes profit above 1.2180 on the H4 chart.
Alternatively, the price may move in the 1.2120/1.2170 channel.
GBP/USD: trading recommendation for December 16
Today, the UK has already presented its inflation report. The reading plunged to 0.3% from 0.7% y/y. Economists had expected inflation to fall to 0.6%.
The market did not react to these results.
The United Kingdom will deliver its preliminary business activity report at 12:30 (GMT+3). The services PMI is expected to rise to 50.5 from 47.6. The manufacturing PMI should drop to 55.6 versus 55.9.
Meanwhile, one should not forget about the trade talks between London and Brussels. Any information about the trade deal may bring the quote under pressure.
Some good news about Brexit is likely to lead to the strengthening of the pound sterling.
Some bad news about Brexit may lead to the weakening of the pound sterling.
As for the technical analysis, the pound terling has already gone above the local high of 1.3476 recorded on December 9. The quote is now moving in the resistance area of 1.3475/1.3540. Technically, it may have an adverse impact on the volume of long positions* (buy deals*).
If the price breaks through the resistance area, the quote should stay above 1.3540 on the H4 chart. In such a case, the price may go to 1.3650-1.3700.
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