EUR/USD - 4H.
The EUR/USD pair closed above the correction level of 50.0% (1.1080) on December 10, which allows traders to count on further growth of quotes in the direction of the next correction levels of 61.8% (1.1104) and 76.4% (1.1133). The upward trend range continues to display the "bullish" mood of traders, but it can change today thanks to the information background, which will be very interesting. The rebound of the pair from the Fibo level of 61.8% will work in favor of the US currency and the beginning of the fall of quotes in the direction of the correction level of 38.2% (1.1057).
The key event of the day, of course, is the meeting of the Fed, its results and the speech of Jerome Powell, who previously spoke only after 4 meetings of the regulator in the year, now - after each, that is, 8 times. However, the Fed meeting in December may become completely uninteresting and uninformative. The problem is that traders with a 100% probability do not expect any changes in monetary policy. Thus, the essence of the entire evening's summing up boils down to Powell's performance and rhetoric. However, traders are unlikely to hear anything really interesting. Powell can only note improving economic statistics and be optimistic about the future of the economy. Thus, the inflation report, which will be released a few hours before the end of the Fed meeting, can be much more interesting. It is predicted a sharp acceleration in inflation to 2.0%, which the Fed considers the target and seeks exactly this value of the consumer price index. Thus, an increase in inflation to 2% may cause additional demand for the US currency.
Also, the US dollar may begin to enjoy additional demand in the coming days based on traders' expectations of postponing the introduction of duties on goods from China. Let me remind you that Donald Trump must decide on this issue before December 15. Since both sides, as assured by Beijing and Washington themselves, are striving to come to a common denominator and sign a trade agreement, it is expected that no duties will be introduced. At the very least, China sees the postponement of the introduction of new duties as an opportunity to continue dialogue with America. However, if Donald Trump's actions could be predicted with such ease, then he would not be Donald Trump. The administration of the US president has not yet made any statements regarding the abolition of the new round of duties. US Secretary of Commerce Wilbur Ross said that the conclusion of the right agreement is much more important than the date of its signing. However, Ross noted that the first phase of the agreement is the easiest, it addresses issues of trade and market access. And more complex issues will be addressed at a later stage. I believe that Trump will impose duties on December 15, as the reverse decision may mean that the US leader backed down in negotiations with China. Potentially, this will mean the resumption of a period of deterioration in the economic performance of both the US and the European Union.
Forecast for EUR/USD and trading recommendations:
On December 10, traders will be closely watching economic data from the US and information that will come in the evening from the Fed. Depending on the nature of this information, trades will be conducted. Closing below the Fibo level of 50.0% will work in favor of the US currency and the resumption of the fall and may coincide with the nature of the information background today. Sales today will be more preferable.
The Fibo grid is based on the extremes of October 21, 2019, and November 29, 2019.
