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11 December Forex daily review

Sergiy Zlyvko
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On Wednesday, the U.S. dollar closed up against the British pound and Australian dollar, as well as decreased against the euro and the Swiss franc. British pound on aggressive sales and Aussie around the market much lay down the basic pairs GBPUSD and AUDUSD. The euro/dollar after trading at 1.3810 tested 1.3795. Pound/dollar after falling to 1.6340 stabilized at 1.6360.

Currently the single currency remained the main favorite to strengthen against the dollar, but the big banks through awareness ribbons make the market ready for sales of euro and point out as the turning factor Double Top pricing model. The first peak is the day of October 25, with a maximum of 1.3830. Based on the background information and recommendations of the banks to sell the euro is likely to put a significant amount of orders on the EUR at 1.3850.

Because of yesterday’s decline GBPUSD and AUDUSD, today we are against dollar sales. There are chances that the GBP and AUD today will put downward pressure on EURUSD and USDCHF. We recommend waiting for important event, and only then make trading decisions.

At 8.00 GMT head of the ECB M. Draghi will deliver a speech. At 9.00 GMT a monthly report of the ECB and the Bank of England Quarterly Bulletin will be published. At the same time there will be a press conference of the Swiss National Bank. We can see that in the period from 8.00 to 9.00 GMT currency market may fall from their positions. Such an event can exchange in one direction or may in different directions. We need to be vigilant and if you have open positions, please do not leave them unattended at this time.

At 10.00 GMT the report on industrial production in the eurozone in October is going to be published. It is expected that the annual rate remained unchanged and monthly rose by 0.3% against a decline of 0.5% in September.

At 13.30 GMT the statistics from the U.S publishes: report on retail sales for November and weekly data on the number of initial applications for unemployment benefits.

According to five consecutive bases on the indicator AO we thought yesterday DXY index will go to correction, but eventually euro/pound cross rate and the euro supported the dollar index and updated at least formed a divergence. We assume that the index of the dollar today will return to the level of 80 points.

The EURUSD after correction to 1.3740 in the U.S. session will may check the strength of the 38th figure. Powered crosses bullish trend continues unabated, but given yesterday’s drop of the pound and the Australian dollar, assume that at the end of the day the euro/dollar fell to 1.3750. If the folding process of long positions will accelerate under the influence of the cross-rate EURGBP, then the EURUSD will repeat yesterday’s drop of GBPUSD.

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