Events to look out for today:
4:30 p.m. United States:.
The euro updated its three-week high the day before, but failed to gain a foothold above the level of 1.1100. Today I expect a downtrend for two reasons. First, the debt market has seen a decline in the spread of 10-year German/US government bonds, which traditionally negatively affects the value of the single European currency. U.S. bond yields are rising rapidly, which will support the dollar. Secondly, investors actively buy up shares on world stock exchanges, which will lead to a decline in the euro, as the precious metal strongly correlates with the single European currency. Those traders who thought that stock markets would collapse in December, may be very disappointed, as the United States and China are ready to sign a trade agreement before December 15, as the representatives of the U.S. Department of Commerce said yesterday.
Trading recommendation: Sell 1.1096/1.1116 and take profit 1.1045.
The British pound has updated the maximum for the last seven months. Two scenarios can now be considered. Both assume an increase in the quotations of the British currency. In the first scenario, we can expect growth from current levels to the area of 1.3170, which may be caused by the continuation of the “bullish” rally in the oil market, as the British currency strongly correlates with oil . Tonight, the results of the OPEC summit will be announced, and many of its participants are in favor of prolonging the agreement to limit hydrocarbon production either until July 1, 2020 or until January 1, 2021. In the second scenario, we can expect a technical correction to the area of 1.3075, after which the quotes will again show growth. The debt market points to this outcome: the spread of 10-year UK/US government bonds shows a decline. In my opinion, today it is advisable to wait for a correction, after which it is possible to re-open positions for the purchase of the pound.
Trading recommendation: Buy 1.3075/1.3059 and take profit 1.3131.
The upward trend on the world stock markets will have a positive impact on the quotes of this currency pair. Investors are once again buying shares on world platforms – we are seeing a bullish rally on all continents. Earlier in the week, Donald Trump criticized china and spoke of his reluctance to strike an agreement with Beijing, but on Wednesday his aides said a trade deal would be signed in the next two weeks. Why have the mood changed so much? Trump has repeatedly had this tactic: first to say something negative, and then something positive. In the coming days, I expect a new record for the American stock index, which, in turn, will allow the pair to test the psychological level of 110.00.
Trading recommendation: Buy 108.70/108.55 and take profit 109.14.