Daily F.X. Analysis, December 03– Top Trade Setups In Forex - Weaker Dollar Sentiment Dominates!  

The United States, the ISM Manufacturing PMI came weaker than expected for November and weighed on U.S. Dollar. At 20:00 GMT, the ISM Manufacturing PMI from the U.S. dropped to 48.1 against the expectations of 49.2.

Besides, the European Central Bank's new President, Christine Lagarde, said that ECB would remain "resolute" in restoring the price stability of the Eurozone under her presidency. She added that an upcoming strategy review will be wide-ranging and would include Inflation as well as climate change.

Economic Calendar - Weaker Dollar Sentiment 

BTC/USD - Daily Analysis

The BTC/USD weekly graph drew a thread that tested the support level of around $6,550 during the previous week, placing a low just below a downside wick from May 2019. Under $6,550, the coin requires weekly support and unusual price action unto $5,760. 

Back in April, Bitcoin's price recorded crucial price action between $5,760 and $4,890, symbolizing a place of future support. This range of support also corresponds with the digital asset's 200-week moving average near $4,990. 

On Tuesday, the leading cryptocurrency continues to hold above the 7,220 support zone. A bearish breakout of 7200 levels on the 4-hour chart can help traders capture a sell position until 6900. 

BTC/USD - Daily Technical Levels

Support      Resistance 

7,197.1          7,404.45

7,076.79      7,491.49

6,869.44      7,698.84

Pivot Point 7,284.14

BTC/USD – Daily Forecast

The BTC/USD consolidates within the same technical ranges that we spoke about yesterday. The leading cryptocurrency continues to hold above the 7,220 support zone. A bearish breakout of 7200 levels on the 4-hour chart can help traders capture a sell position until 6900. 

Conversely, the closing of Bitcoin above 7200 can extend buying until 7415 today. The leading indicator, such as MACD, is holding below zero along with RSI below 50, suggesting chances of a bearish bias among traders today.

EUR/USD – ECB President Lagarde Drives Bullish Bias

The EUR/USD pair closed at 1.10784 after placing a high of 1.10910 and low of 1.10029. Overall the movement of pair remained strongly Bullish that day. At 13:15 GMT, the Spanish Manufacturing PMI showed growth to 47.5 against the expectations of 46.5 and supported single currency – Euro. At 13:45 GMT, the Italian Manufacturing PMI also showed a minor growth of 47.6 against the expectations of 47.5, at 13:50 GMT, the French Manufacturing PMI also supported Euro when released as 51.7 against the expected 51.6. 

At 13:55 GMT, the German Manufacturing PMI also showed growth in November to 44.1 against the expectations of 43.8. At 14:00 GMT, the Final Manufacturing PMI for the whole Eurozone also increased to 46.9 from expected 46.6 and supported Euro.

The stronger than expected PMI from the whole Eurozone gave strength to the single currency Euro against its rival U.S. Dollar, which remained weaker on Monday after the release of PMI from the U.S.

At 20:00 GMT, the ISM Manufacturing PMI form the U.S. was dropped in November to 48.1 from expected 49.2 and weighed on U.S. Dollar. Strong Euro and weak Dollar on Monday gave a push to EUR/USD prices to leap them near session top at 1.1091. 

The European Central Bank's new President, Christine Lagarde, said that ECB would remain "resolute" in restoring the price stability of the Eurozone under her presidency. She added that an upcoming strategy review will be wide-ranging and would include Inflation as well as climate change.

She acknowledged the side-effects of the ultra-loose policy of ECB and said that the review would focus on a better understanding of how the longer-term trends affect the things which can be controlled by the Central Bank. She said that despite years of pumping liquidity into the financial system, Inflation was far from returning to the goal of "below, but close to 2%". She said that ECB itself has become concerned that its policy might threaten financial stability. Christine Lagarde would hold her first Monetary Policy Meeting at ECB on December 12.

EUR/USD - Daily Technical Levels

Support Resistance 

1.1025      1.1112

1.097       1.1145

1.0883    1.1232

Pivot Point 1.1057

EUR/USD – Daily Forecast

The EUR/USD spike to place a high around 1.1085 area, but here it's testing the double top resistance at 1.1080 level. Closing of tweezers top is suggesting chances of a bearish bias in the EUR/USD pair. We can expect the EUR/USD to drop until 1.1050, the 38.2% Fibo and 1.1040 level, which marks 50% retracement for the EUR/USD. 

On the flip side, a bullish breakout of 1.1085 level can trigger buying until 1.1120, but it seems the least likely scenario due to the absence of significant economic data.

GBP/USD - Construction PMI In-Play

The GBP/USD closed at 1.29381 after placing a high of 1.29488 and a low of 1.28957. Overall the trend for GBP/USD remained Bullish that day.

At 14:30 GMT, the Final Manufacturing Purchasing Manager's Index (PMI) from the United Kingdom was published and showed growth to 48.9 from the expectations of 48.3 for November. Stronger than expected PMI gave strength to single Currency – Pound on Monday.

On the other hand, from the United States, the ISM Manufacturing PMI came weaker than expected for the month of November and weighed on U.S. dollars. At 20:00 GMT, the ISM Manufacturing PMI from the U.S. dropped to 48.1 against the expectations of 49.2.

Steady GBP and Weak USD moved GBP/USD is bullish trends at the starting day of the week. As the U.K. elections are near, there are chances that volatility will rise in the British Financial market. Last week, the poll results showed mixed results relating to victory in elections. 

The closely watched YouGov MRP Poll, which had a lot of attention of traders, predicted that the Conservative Party would win the elections. The reason being the YouGov poll as highly trusted was its accurate prediction in 2017. 

The pound has been deriving its strength from this prediction, given the reduced risk of another hung parliament in case of another party winning the election, which could immediately bring back the prospect of no-deal Brexit.

The market is moving under the expectation of polls to prove accurate and Boris Johnson to win upcoming elections with a majority and then for the U.K. to leave E.U. on scheduled January 31, 2020.

GBP/USD - Daily Technical Levels

Support Resistance 

1.2908      1.2961

1.2876      1.2982

1.2823      1.3035

Pivot Point 1.2929

GBP/USD – Daily Forecast

The GBP/USD is on a bullish run since it violated the double top resistance level of 1.2925. Even for now, the pair has closed series of candles above this level, which is making this level very crucial for Sterling buyers. 

Above this level, the GBP/USD is likely to continue trading on the upper side until 1.2970, while a bullish breakout of 1.2970 level can lead the GBP/USD prices towards 1.3010 level. The 50 EMA and leading indicators like RSI and MACD are also in supporting bullish bias in Sterling. 

All the best for today.