Currency Analyst since 2010

Forex trading plan for December 1

Elizabeth Belugina

Pay attention to the bloc of Chinese data on Tuesday morning – the releases, especially Caixin manufacturing PMI, will be important for the market’s risk sentiment. The forecasts are rather well, though China’s manufacturing sector probably remained in bad shape. During American session watch ISM Manufacturing PMI (forecast is positive): this release is an important gauge of the US economy.

EUR/USD remained under pressure ahead of the European Central Bank’s meeting on Thursday as the regulator will likely expand QE and/or cut the deposit rate. German retail sales and Italian CPI fell both by 0.4% on Monday.  German inflation came in line with expectations. At the same time, the recent lows haven’t been confirmed by daily RSI. Traders are cautious waiting for the events of the second part of the week. Support is at 1.9565, 1.0520/00 and 1.0480. Resistance is in the 1.0650 area.

GBP/USD visited levels below 1.5000. Strong support is located in the 1.5000/4980 area. Failure here will lead to a much deeper decline. Resistance is at 1.5050, 1.5100 and 1.5150. The Bank of England will release bank stress tests results and the BOE financial stability report. The regulator may ask commercial banks to increase reserves in case of economic problems. Such step may be viewed as a type of monetary tightening. Governor Mark Carney will speak at 09:00 GMT.

USD/JPY is trying to fix above 123.00. The short-term technical outlook has improved. Next resistance levels are at 123.60 and 124.00. Support is at 122.50 and 122.20. Focus on the market’s risk sentiment and the US data releases.

AUD/USD tested 0.7170, but then turned up to 0.7200. The Reserve Bank of Australia is expected to keep rates unchanged early on Tuesday. However, taking into account the deep decline in commodity prices (in particular, iron ore), the RBA can alter its statement to bit a more dovish one.  Supportisat 0.7150. Resistanceliesinthe 0.7240/50 area. 

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