EUR/USD: Euro shows a downward trend againThe EUR/USD pair is showing a noticeable decline, correcting after active "bullish" trading at the end of last week. Quotes are approaching the 1.0531 mark, testing it for a downward breakdown, while market participants are waiting for the publication of fresh statistics on business activity in the United States and the eurozone for November.According to forecasts, the index of business activity in the industrial sector of Germany and the eurozone, calculated by S&P Global, will remain at the levels of 43.2 points and 45.2 points, respectively. In the United States, this indicator, according to analysts, will remain at 48.8 points, and data from the Institute of Supply Management (ISM) may show an increase from 46.5 points to 47.5 points. At 12:00 (GMT+2), markets are waiting for the publication of data on the unemployment rate in the eurozone for October, which is projected at 6.3%, as well as a speech by the head of the European Central Bank, Christine Lagarde. Her comments may shed light on the regulator's plans for further monetary easing.Last week, the eurozone presented inflation data for November: the annual consumer price index rose from 2.0% to 2.3%, which fully coincided with analysts' expectations. On a monthly basis, the indicator decreased by 0.3% after rising by the same amount a month earlier. Core inflation increased year-on-year from 2.7% to 2.8%, but decreased by 0.6% on a monthly basis after the previous 0.2% increase. Experts are confident that the European Central Bank is unlikely to resort to more aggressive easing measures, although some members of the Governing Council admit this possibility. For example, the head of the Bank of France, Francois Villeroy de Gallo, suggested that a rate cut of 50 basis points at the December meeting is quite possible.Resistance levels: 1.0530, 1.0561, 1.0600, 1.0630.Support levels: 1.0500, 1.0450, 1.0400, 1.0350.GBP/USD: investors' attention is focused on the financial report of the Bank of EnglandIn the morning hours, the GBP/USD pair shows a moderate decline, retreating from the highs reached last week on November 13, and is trading at 1.2686. The pound continues to maintain neutral dynamics, which allows the US dollar to maintain its leading position in the asset.At the end of last week, the Bank of England presented a financial stability report, where it outlined the main economic benchmarks for the near future. In the document, the members of the Financial Policy Committee stressed the stability of the UK banking system: the stress tests carried out confirmed the high level of capitalization and liquidity of national banks. The regulator called geopolitical instability and an increase in public debt the key threats to the economy. At the same time, the achievement of intermediate inflation reduction goals was noted as a positive result of the current monetary policy, which opens up opportunities for adjusting interest rates in the short term. The Bank of England also noted the relative stability in the labor market, which contributes to the stability of the economy. Today at 11:30 (GMT+2), the attention of market participants will be focused on the business activity index, which is estimated based on a survey of purchasing managers of leading British companies. According to analysts' expectations, in November the index value in the manufacturing sector will remain at 48.6 points, which indicates the continuation of a negative trend in the industry, despite some support from the regulator's policy.Resistance levels: 1.2730, 1.2890.Support levels: 1.2640, 1.2490.NZD/USD: New Zealand real estate market shows continued declineThe NZD/USD pair is showing a correction, trading around the 0.5891 mark against the background of strengthening the position of the US dollar.The New Zealand currency is under pressure due to weak macroeconomic indicators in the real estate market. In October, the number of construction permits issued decreased by 6.9% compared to the same period last year and amounted to 2,850 thousand. In the 12 months ending in October, the total number of permits decreased by 16.0%, reaching 33,467 thousand. The analysis of statistics on various housing categories shows an increase in negative dynamics: townhouses amounted to 1,174 thousand permits, which is 15.0% lower than a year earlier; Apartments accounted for only 0.183 thousand permits (-24.0%), and buildings in rural areas showed the sharpest drop by 29.0%, to 0.130 thousand. The situation in the housing sector is rapidly approaching the minimum levels recorded in January, increasing pressure on the economy and strengthening expectations of further monetary easing by the Reserve Bank of New Zealand.Resistance levels: 0.5920, 0.6020.Support levels: 0.5870, 0.5800.AUD/USD: an attempt to break through 0.6450 ended with an upward pullbackAfter the AUD/USD pair failed to break through the 0.6450 support level last week, it demonstrates its readiness to move towards the 0.6550 mark.The upward trend is supported by statements by the head of the Reserve Bank of Australia (RBA) Michelle Bullock. Last week, she stressed that core inflation remains at a high level, which excludes the possibility of an interest rate cut in the near future. The monetary policy regulator's meeting is scheduled for December 10, and if the rate remains at 4.35%, the Australian dollar may receive additional support, opening the way to the levels of 0.6550 and 0.6655. Additionally, the Australian currency is supported by data on the construction sector: in October, the number of construction permits issued increased by 4.2% on a monthly basis, significantly exceeding the forecast of 1.2%. Retail sales also increased by 0.6% over the month, while analysts expected 0.4%. However, the general state of the economy is not without weaknesses: gross profit of companies in the third quarter decreased by 4.6% compared to the previous period, where growth of 0.6% was forecast, which confirms the continuing challenges for businesses in the context of high borrowing costs.Resistance levels: 0.6550, 0.6655.Support levels: 0.6450, ...
GBP/USD continues to show weak growth around the 1.2695 mark, trying to regain lost positions. However, the activity of buyers remains low.The pair was influenced by the negative macroeconomic statistics of the United Kingdom. Retail sales fell 3.4% in November after rising 0.3% a month earlier, although analysts had expected an increase to 0.7%. Business activity data was also disappointing: the PMI index for the manufacturing sector fell to 48.0 points, while in the United States, on the contrary, similar indicators improved. Investors' attention today is focused on the index of business activity in the UK services sector. Analysts expect the indicator to be at the level of 50.0 points. In addition, today there will be a speech by the head of the Bank of England, Andrew Bailey, who can shed light on the prospects for the interest rate.The situation in the real estate market remains an additional pressure on the pound. According to the Bank of England, a significant proportion of mortgage loan holders predict an increase in interest rates in the coming years, which will lead to an increase in monthly payments. Rising inflation and geopolitical risks also raise concerns about financial stability.In the USA, data on private sector employment from ADP will be published today (expected to decrease to 150,000), as well as statistics on business activity in the service sector from ISM and S&P Global. Fed Chairman Jerome Powell's speech in the evening may affect market expectations for a rate change.Technical analysis for GBP/USDOn the daily chart, the Bollinger indicator shows horizontal stabilization, but retains the potential for growth. The MACD indicates a buy, but the Stochastic is declining.Open long positions with a confident breakout of the key resistance of 1.2700 with a target of 1.2817. We put the stop loss at 1.2650.Sales when rebounding from 1.2700 and breaking down the 1.2650 level with a target of 1.2550. In this case, we will set the stop loss at ...
GBP/USD shows an upward trend, continuing to strengthen in the short term and updating the local highs reached on November 14. The growth of the British pound is taking place against the background of the stability of the external background: American stock exchanges are closed due to Thanksgiving, and the news flow remains moderate. Market participants' expectations relate to the easing of the monetary policy of the Central Bank of Great Britain and the United States, however, the position of the Bank of England looks more dependent due to signs of a decrease in domestic demand and a weakening of inflationary pressure, which previously reached the upper limit of the target range.Meanwhile, the slowdown in economic activity in the UK strengthens the case for lowering interest rates. According to data for November, the index of business activity in industry fell to 48.6 points (from 49.9), and in the service sector fell to 50.0 points (from 52.0), which was lower than analysts' expectations.Today, the markets are focused on the financial stability report and the minutes of the November meeting of the Bank of England. Market participants expect clarity on possible rate cuts in December and an assessment of the pace of future monetary policy easing. Data on consumer lending for October is also expected, where the indicator is projected to grow from 3.8 to 4.1 billion pounds.Statements by Claire Lombardelli, deputy governor of the Bank of England, confirm that the plans of the new US President Donald Trump to impose tariffs on imports from Mexico, Canada and China may affect global inflation, including the UK. In her opinion, such measures can lead to a change in global trade flows and increased price pressure.Technical analysis for GBP/USD for todayOn the daily chart, the Bollinger indicator is narrowing, which reflects the mixed trading dynamics. The MACD continues to grow, signaling the continuation of a confident upward momentum, while the Stochastic indicates the risk of overbought pound.Trading recommendations- Long positions: possible with an upward breakout of the 1.2730 level. The target is 1.2817. The recommended stop loss is 1.2690.- Sales are advisable with a rebound from the 1.2730 level down and a subsequent breakdown of the key support of 1.2700 with the price fixing below this level. The target is 1.2600. We will set the stop loss at ...
EUR/USD: ECB representative Mario Centeno called for a neutral rate levelThe EUR/USD pair shows indecisive dynamics, remaining near the level of 1.0480. Activity in the market remains moderate after stormy trading, which did not lead to significant changes in quotations. Yesterday's rise in the euro was due to statements by Donald Trump, who won the US presidential election, about his readiness to increase import duties on goods from China, Mexico and Canada, but without mentioning the European Union. This has led to speculation about a possible softening of his pre-election position on trade with the EU.Investors are focused on statements by representatives of the European Central Bank (ECB). Mario Centeno, a member of the Board of Governors, expressed the opinion that the interest rate should be returned to a neutral range, optimally decreasing to 2.0% in moderate steps of 25 basis points. However, Centeno also admitted the possibility of a more aggressive rate cut in December to support economic activity in the region. According to him, such measures will help bring inflation closer to the target level below 2.0%, which confirms the effectiveness of the current monetary policy. Most analysts share this opinion, believing that the rate may be reduced to 3.00% at the upcoming ECB meeting. Such a decision is expected against the background of the ongoing recession in the manufacturing sector: the business activity index fell from 46.0 to 45.2 points in November, although analysts predicted it would remain at the same level.Resistance levels: 1.0500, 1.0530, 1.0561, 1.0600.Support levels: 1.0450, 1.0400, 1.0350, 1.0300.GBP/USD: the pound quotes are preparing to riseThe decline in the GBP/USD pair slowed down in the range of 1.2505–1.2480, which is due to profit-taking on short positions opened during October and November, as well as the publication of unfavorable macroeconomic statistics from the United States.According to the Conference Board, in November, the consumer confidence index fell to 111.7 points, which turned out to be slightly lower than the forecast of 111.8 points. Additional pressure was exerted by the October report on new home sales, which fell by 17.3% instead of the expected decline of 3.6%. This was the most significant drop since 2010: total sales amounted to 610.0 thousand against the projected 730.0 thousand. Given the importance of this sector to the economy, such a recession may slow down the growth of gross domestic product (GDP) The United States in the coming quarters.Against the background of the released British statistics, the pound received support. The consumer price index (CPI) rose to 2.3% year-on-year in October, exceeding analysts' forecasts (2.2%) and the previous value (1.7%). On a monthly basis, the indicator was 0.6%, reaching its highest since April, which increased inflation risks. Such dynamics may force the Bank of England to postpone the decision to reduce the interest rate at its meeting on December 19. On Friday, the market's attention will be focused on the publication of financial stability reports and minutes of the last meeting of the Bank of England, where hints can be given about the future course of monetary policy. Experts also expect that the volume of consumer lending will grow from 3.8 billion to 4.1 billion pounds, and the number of approved mortgage applications in October will decrease from 65,647 thousand to 64,100 thousand.Resistance levels: 1.2715, 1.2870, 1.3055.Support levels: 1.2480, 1.2322, 1.2058.USD/CAD: сorporate profit in Canada decreased by 2.5% in the third quarterDuring the Asian trading session, the USD/CAD pair shows a correction at the level of 1.4070. The Canadian dollar remains under pressure due to the weakness of the domestic economy, and the growth of the US currency supports a confident upward trend.According to Statistics Canada (StatsCan), the completed reporting period for the third quarter showed a decrease in net profit before tax (NIBT) by 2.5%, which is equivalent to a decrease of 4.1 billion Canadian dollars. As a result, the figure reached 157.4 billion Canadian dollars. The most noticeable slowdown is observed in the financial sector, where a decrease was recorded in ten of the thirteen industries, and total losses amounted to 5.5% or 2.5 billion Canadian dollars, which led to a result of 44.8 billion Canadian dollars. In the non-financial sector, 17 of the 39 subsectors also reported a drop in profits, by an average of 1.3% or 1.5 billion Canadian dollars, which reduced the total to 112.6 billion Canadian dollars.Resistance levels: 1.4100, 1.4250.Support levels: 1.4010, 1.3820.Oil market overviewQuotes of WTI Crude Oil continue to move within the long–term downward channel, however, consolidation has been observed within it for the second month in the sideways range of 67.19-71.88.Last week, the price rose from the lower boundary of this corridor to the level of 71.80, which was associated with increased geopolitical tensions. This happened after the US authorities approved the use of American weapons for strikes on Russian territory, which could potentially damage the oil infrastructure. However, on Monday, the price of oil fell again amid statements by US President-elect Donald Trump about plans to impose duties of 25% on all imported goods from Mexico and Canada, as well as an additional 10% on products supplied from China. Despite the fact that Canadian oil is likely to be exempt from restrictions due to its high importance, measures aimed at reducing Chinese exports increase concerns about a further decline in global oil demand. Additional pressure on the market is exerted by the truce announced today between Israel and the Lebanese organization Hezbollah. This interim agreement helps to reduce geopolitical tensions in the Middle East and reduces the risks of disruptions in the supply of hydrocarbons from the region.Resistance levels: 71.88, 75.00, 78.12.Support levels: 68.75, 65.62, ...
The foreign exchange market is better known as Forex or FX. Trading in this market has become very popular in recent years. However, this is not the case - Forex trading raises a number of questions. For example: what is the foreign exchange market? Which currency pairs are best to trade? Is currency trading risky? Some of the answers to these questions will be found in this article.What is the Forex market?The foreign exchange market is also called the Forex market or the English foreign exchange market. It is simply a market where currencies are exchanged. According to the Bank for International Settlements (BIS), the foreign exchange market is the largest market in terms of total volume, with up to USD 5 trillion traded daily. It is not a physical place, but rather an electronic network where institutions or individuals trade with each other.The left-hand currency is called the base currency and the right-hand currency is called the quote currency. The second currency indicates the value relative to 1 unit of the base currency. For instance, the formula EUR/USD = 1.4000 implies that EUR/USD trades at 1.4000, i.e., 1 Euro has a value of $1.40. The first currency is always expressed in the second currency. USD/JPY at 110.50 means that one USD is worth JPY 110.50. EUR/USDWhat are the best currency pairs to trade?The best currency pairs to trade effectively depend on your trading style. If you have a short term strategy, for example, if you like to scalp, then the major currency pairs will be most profitable for you because of the low spreads.On the other hand, for a fundamental trader, smaller currency pairs will be of interest based on long-term analysis. The most profitable currency pairs may be those involving the Australian dollar, Japanese yen or Canadian dollar.The best forex currency pairs:EUR/USD: this pair has the lowest spread and is not very volatile.GBP/USD: this pair is interesting in terms of spreads and possible gaps, but it is quite volatile.USD/JPY: this pair has low spreads and offers some interesting possibilities. GBP/USDHow to get started trading currencies online?To start trading currencies online, follow these steps:- Choose a regulated and reputable broker- Choose a broker by the quality of execution of trading instructions- Decide on the trading style that suits you best (scalping, intraday trading, swing trading - you keep your position open for several days)- Determine the appropriate leverage effect in the stock market according to your strategy and experience.- Do not invest more than you can afford to lose.- Choose an intuitive, simple and secure trading platform such as MetaTrader 4.- Try all the above steps on a demo account, before trading live.Read more: Features of intraday trading on the Forex marketGoldIs online currency trading dangerous?Like any financial investment, currency trading online is subject to risks. However, there are different methods to control these risks:- Determine the price of the currency pair at which you want to close a position if developments are unfavourable (for example, if you buy and the price falls, or if you sell and the price rises),- Determine the size of the trade so that your potential loss should not exceed 2-3% of your capital per trade,- Estimate your risk/return ratio (loss/profit) before you open the trade. By default you should have a greater potential for profit than loss, e.g. risk 50 pips, but try to make a profit of e.g. 100 pips.For proper money management and risk reduction it is advisable to start trading on a demo account and try things out on the dirt first. Such an account will allow you to trade in real market conditions, but with fictitious capital, so that you have a complete understanding of the foreign exchange market without any risk.Read more: Forex broker: how to choose a good ...
