Daily F.X. Analysis, December 12– Top Trade Setups In Forex - Eyes on U.K. Parliamentary Votes!
By Eaglefx On December 12, 2019 in Daily Market Analysis
The U.S. dollar continues to keep the bearish bias over dovish monetary policy. Despite the rates being on hold, the U.S. dollar did not gain traction in the market and continue to decline. The decision of the Federal Reserve to not change its rates or policy next year came in line with the market expectations and failed to give strength to the U.S. dollar.
When asked whether a hike in interest rates would be seen next year, Chairman Jerome Powell answered that a persistent increase in inflation would be required to withdraw the stimulus Fed added this year.
Economic Calendar - Eyes on U.K. Parliamentary Votes!
BTC/USD - Daily Analysis
The BTC/USD has dropped below the trading range of 7400 - 7300, to trade around 7,200 level. The leading crypto pair was trading within a symmetric triangle pattern, which was supporting it around 7330.
At the moment, the same support level is working as a resistance, keeping the BTC/USD prices below 7,330. The BTC/USD traded in a bearish tone, shedding 1.80% at the time of writing, as the bulls try to break below $7500. The BTC/USD tested high at $7,660 and a low at $7,370, with most of the price action taking a point in the other half of the day.
BTC/USD - Daily Technical Levels
Support Resistance
7,383.18 7,703.07
7,187.84 7,827.62
6,867.95 8,147.51
Pivot Point 7,507.73
BTC/USD – Daily Forecast
The BTC/USD is facing triple bottom support around 7080, along with resistance around 50 periods EMA at 7,248. The RSI and MACD are in a selling zone, suggesting chances of a bearish breakout. In that case, the bearish breakout can expose the BTC/USD towards 6,850 and 6,720.
Today, the continuation of a bearish trend may lead it towards the 7095 area while the pair may face resistance at 7435 now. The leading indicators, such as RSI and MACD, are also in support of bearish bias today.
EUR/USD – ECB Monetary Policy on the Cards
The EUR/USD pair opened at 1.10914, and it has placed a high of 1.11447 and a low of 1.10701 until now. Overall the movement of pair remained bullish throughout the day and is currently trading at 1.11309.
EUR/USD dropped to 1.107 before bouncing back to the upside after the Federal Reserve released its decision on Wednesday. The pair is trading close to 1.114 level when the American session is near to end.
Some technical factors and the weakness of greenback drove this pair EUR/USD in the upward direction. Fed voted to conserve its rates on hold and announced to not change them in 2020 also.
Despite the rates being on hold, the U.S. dollar did not gain traction in the market and continue to decline. The decision of the Federal Reserve to not change its rates or policy next year came in line with the market expectations and failed to give strength to the U.S. dollar.
When asked whether a hike in interest rates would be seen next year, Chairman Jerome Powell answered that a persistent increase in inflation would be required to withdraw the stimulus Fed added this year. And that was a reasonably high bar which he does not think will be met in 2020.
Following the meeting of the Federal Reserve on Wednesday, the 10-year Treasury bond yield fell below 1.80% to the lowest in a week, which affected the U.S. Dollar Index and made it decline to its lowest intraday level since August. The U.S. Dollar Index dropped to 97.10 on Wednesday and weighed on U.S. dollar prices.
Weak U.S. dollar gave strength to its rival currency against it, and hence, the EUR/USD pair moved in an upward direction in the absence of any macroeconomic data from the Eurozone.
However, on Thursday, the governing council of the European Central Bank will have its policy meeting with its new president Christine Lagarde. The expectations of the market suggest no change in the policy.
EUR/USD - Daily Technical Levels
Support Resistance
1.1072 1.1105
1.1052 1.1118
1.102 1.1151
Pivot Point 1.1085
EUR/USD – Daily Forecast
The EUR/USD traded sharply bullish over dovish FOMC and weakening the U.S. dollar. The EUR/USD pair is now holding into the small bullish channel, which is surprising he pair around 1.1125 along with the resistance area of around 1.1140. A bullish breakout of this level can extend buying until 1.1175.
Today, the EUR/USD pair can exhibit dramatic movement on the release of the ECB rate decision. Where dovish sentiment from ECB may drive sell-off in the Euro, alternatively, a bullish breakout can be experienced in the EUR/USD.
GBP/USD - Parliamentary Elections In Eyes
The GBP/USD opened at 1.31536, and it has placed a high of 1.32131 and a low of 1.31052 since then. Overall the movement of pair GBP/USD remained bullish throughout the day, and the pair is currently trading at 1.31948.
The GBP/USD pair rallied to fresh eight months high of 1.32132 after the drop of U.S. dollar due to recent dovish comments from Fed Chair Jerome Powell. The U.S. dollar index dropped to 97.08 from the highest 97.6 and weighed the U.S. dollar.
During his speech, Powell said all the things in favor of the U.S. dollar. Still, in the Q&A session, when asked about the rate hike possibility next year, Powell said that it seemed impossible because it was only possible when inflation would go above the target of 2%. So, there are no hopes for a rate hike in 2020.
On the other hand, the British General elections are only one day away when voters in the United Kingdom will go to the polls for a crucial vote. This election would determine the country’s future and how and when it will leave the European Union.
British politics have become chaotic because, in less than five years, this will be the fifth primary vote in the country. The European Parliament elections and the British referendum were major elections included in those.
U.K. Government has failed to resolve its most significant challenge in decades to leave from E.U. All began when, in 2016, voters stunned the world and voted to leave from Europe. The Brexit vote was shocking, and it split the nation and the parliament.
Boris Johnson shifted Prime Minister of the U.K. this summer and failed to pass his Brexit withdrawal agreement in the parliament. So, to win a majority in parliament, Johnson called a snap election to get his Brexit deal done.
The former Prime Minister of UK Theresa May has also called an early election and tried to get her withdrawal deal approved three times this year but failed. If Boris Johnson wins on Thursday’s election and parliamentary approval, he hopes to take the United Kingdom out of European Union by the end of January.
Whereas his opponent, Jeremy Corbyn, the leader of the Labour Party, which is the second-largest party in the parliament, has refused to take a side on Brexit. He said that he would renegotiate a withdrawal agreement with the European Union and then hold another referendum. In that referendum, Britain’s could vote for his deal or to stay in the E.U.
GBP/USD remained in high demand on Wednesday ahead U.K. elections and also because of weakened U.S. dollar.
GBP/USD - Daily Technical Levels
Support Resistance
1.3121 1.3204
1.3085 1.3252
1.3002 1.3335
Pivot Point 1.3168
GBP/USD – Daily Forecast
The GBPUSD is exhibiting a stable bullish trend as investors seem optimistic about the victory of the Conservative party and expect Boris Johanson to win the vote. The Cable may remain heavily volatile today and tomorrow as the election outcome will start coming out by tomorrow morning.
On the upper side, the GBP/USD is likely to find resistance around 1.3265 and 1.3336, while the support can be seen around 1.3185 and 1.3110.
All the best for today.