EUR/USD - 4H.
On December 6, the EUR/USD pair performed a reversal in favor of the US dollar and fell to the correction level of 38.2% (1.1057) after two rebounds from the Fibo level of 61.8% (1.1104). However, the rebound from the level of 38.2% can work in favor of the European currency and the resumption of growth towards the same level of 61.8%. Emerging divergences today are not observed in any indicator, and the upward trend corridor clearly shows the current mood of traders.
Last week ended on a minor note for the euro. All week, bull traders tried to push the level of 61.8%, but by the end of the week, the information background from America left no choice for bear traders, who began to actively sell the euro-dollar pair. In short, economic data from America on Friday showed the strongest increase in new jobs outside the agricultural sector (Nonfarm Payrolls), a decline in the unemployment rate to the lowest in 50 years and stronger wage growth than traders expected to see. So traders and analysts are once again talking about the strength of the US economy, despite the trade wars that Donald Trump is starting right and left. According to the latest data, the US president can "bury" the WTO, as it is because of the actions of Donald Trump that can stop the work of the Appeal Committee of this organization. Also, I have already talked about trade wars with Argentina, Brazil, Turkey, and China. But this list can be joined by France, Germany and the whole European Union. Let me remind you that Trump was very unhappy with the fact that the French company Airbus was illegally subsidized, which artificially increased its competitiveness compared to American companies. After that, new rumors began that Trump would impose duties on goods from Europe to compensate for the damage suffered in the case of Airbus. Also, Trump has long stated that he can impose duties on the products of the EU engineering complex, as well as many goods from France, whose president very imprudently allowed himself to declare "the death of NATO's brain", clearly alluding to Washington. In general, there are no signs that the geopolitical situation in the world will soften and tensions will go away.
The current week promises to be extremely interesting in terms of information. First, there will be meetings of the ECB and the Fed. From these organizations, traders do not expect any changes in monetary policies. However, this does not mean that there will be no interesting information from the heads of these organizations, Christine Lagarde and Jerome Powell. According to the latest statistics, the situation in America is improving, high values of Nonfarm Payrolls, a good increase in wages in November - all this suggests that the US economy does not need any new incentives. And if so, it makes no sense for the Fed to cut rates, and it makes no sense for Jerome Powell to hint at monetary easing in the future. On the contrary, Powell can note strong economic data and good economic growth rates, which traders will regard as a positive sign for the dollar. Quite another thing - the meeting of the ECB, which may decide to lower the key deposit rate. The problems of the European Union are visible to the naked eye, economic reports from time to time, although showing small improvements, generally remain at weak levels and values. All this may force Christine Lagarde and the company to take appropriate action.
Forecast for EUR/USD and trading recommendations:
On December 6, traders will try to resume the growth of the pair's quotes according to the trend range. A failed attempt to break the level of 38.2% could boost the demand for the euro currency. A neat purchase of the euro is possible today with targets at 1.1080 and 1.1104. I do not expect high market activity today, as the news calendar today is empty in Europe and America.
The Fibo grid is based on the extremes of October 21, 2019, and November 29, 2019.
