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Forex trading plan for Dec. 4

EUR/USD hit a multi-month low of 1.2320 in the European trade on the softer-than-expected euro zone’s PMI in the Services sector and retail sales data. Daily close below the recent low of 1.2360 would confirm the current bearish move and open the way for a move lower, to the 1.2250/00 area. Markets stay bearish on the euro ahead of the ECB meeting on Thursday – some players expect Mario Draghi to announce a full-scale QE tomorrow.

GBP/USD has once again found support above 1.5600. The pair is supported by a sell-off in EUR/GBP. Still, the efforts of the bulls will likely be constrained because of the general strength of the US dollar. The pair’s consolidating in a triangle ahead of this week’s big events – the Bank of England’s meeting on Thursday and the US NFP on Friday. Resistance is at 1.5710 ahead of 1.5830/50. Sterling’s advance will likely be limited as the BOE will keep rates unchanged worrying about the negative effects from the euro area. A break below 1.5600/5585 will open the way to 1.55 and lower.

USD/JPY showed a bullish close on Tuesday. The pair’s trading just below 119.50. Next levels to watch on the upside are at 119.85 and 120.00. Support is at 118.20 and 117.70.

AUD/USD has recovered some ground from the 0.8380 support, but remains far below the 0.8500 resistance. Australian Q3 GDP was a strong disappointment for the market, strengthening the case for more ECB easing to come. Don’t miss Australian October retail sales and trade balance figures tonight at 00:30 GMT. Forecast for the retail sales is especially downbeat (+0.1% versus prior +1.2%).

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