Forex trading plan for December 2
US Dollar gains remain capped at the beginning of the week: USD index holds below the 100 point resistance. November Manufacturing PMI, released on Tuesday, was a disappointment for traders: it came below the forecast at 48.6. On Wednesday, the Fed’s chief Yellen will deliver a speech in Washington. You should also watch the ADP NFP on Wednesday. However, the most important is yet to come: Yellen’s speech in Congress on Thursday and the US labor market data on Friday will really matter for the US Dollar. If ADP on Wednesday doesn’t disappoint badly, USD could resume the upside tomorrow.
EUR/USD recovered to 1.0615 on Tuesday (local resistance). Watch the euro zone’s inflation data on Wednesday (forecasts – slight improvement). However, they are not expected to change the global picture: the ECB president Mario Draghi is widely expected to announce additional easing measures on Thursday’s meeting. We expect EUR/USD to hit 1.0500 ahead of the meeting and to break lower in case if the easing is announced. If there is no easing on Thursday, EUR/USD could jump higher towards the 1.0800 area. However, don’t forget about “the Fed’s factor” – US dollar still remains the beloved currency of the crowd.
Commodity block currencies strengthened gradually (AUD and NZD), but in the current conditions the rally could end quickly. Watch the Australian GDP tomorrow: the forecast is upbeat, so the pair could jump towards the 0.7380 resistance before reversing ahead of the Fed's news at the end of the week. Your should also watch the Bank of Canada meeting on Wednesday – rate is expected to stay on hold, but the USD/CAD pair still has potential for more upside.