Forex technical analysis:
While optimistic about the recent China-U.S. Trade agreement is heating up, markets remain cautious about making an agreement, sending USD/JPY and EUR lower. With December 15th the time for another turn of US taxes on Chinese goods, markets are watching closely for the first phase of the previous agreement to implement the two sides in less than a month.
Liu Heying, Vice Premier of the State Council and China’s lead in the China-U.S. Comprehensive Economic Dialogue, spoke with U.S. Trade Representative Leite Hitze and Finance Minister Mnuchin. The two sides had constructive discussions on the core concerns of the beginning phase of the agreement and would continue to maintain close exchanges. Only it is now up to us to see whether President Trump will abolish the tax, which could be a key factor in implementing the agreement.
On the other hand, EUR/USD rebounded from a two-year low of 1.0877 hit on October 1st, as markets were optimistic that the eurozone economy would improve with a swap deal between the US and China. Still, analysts say the European and global economies need to perform stronger to sustain the euro’s rally. Meanwhile, the GBP was boosted by expectations that Britain’s Conservatives could gain a majority in the December 12 general election.
Forex fundamental analysis:
The DXY rebounded below 98.00 on Monday, falling above 97.65 and closing at 97.79, meaning the USD is likely to continue on the decline after a short rally. If the DXY rebounds below 98.00 today, the target for the market will fall to 97.65-97.50. Today, DXY short-term resistance at 97.95-98.00, short-term important resistance 98.10-98.15. DXY short-term support at 97.65-97.70, short-term important support at 97.50-97.55.
Monday’s EUR/USD correction was supported by a rally above 1.1050, rising below 1.1090 and closing at 1.1076, meaning that the EUR/USD short-term correction is likely to stay up. If the EUR/USD correction is supported above 1.1050 today, the target for the post-market rally will point to 1.1095-1.1105. Today EUR/USD short-term resistance at 1.1090-1.1095, short-term important resistance at 1.1110-1.1115. EUR/USD short-term support at 1.1050-1.1055, short-term important support at 1.1030-1.1035.
Forex Trading Strategy Recommendations:
EUR/USD: 1.1055 Buy, 1.1030 Stop Loss, 1.1110 Take Profit
GBP/USD: 1.2920 Buy, 1.2880 Stop Loss, 1.3020 Take Profit
USD/CHF: 0.9865 Buy, 0.9840 Stop Loss, 0.9935 Take Profit
USD/JPY: 108.40 Buy, 108.15 Stop Loss, 109.30 Take Profit
AUD/USD: 0.6795 Buy, 0.6780 Stop Loss, 0.6835 Take Profit
USD/CAD: 1.3230 Sell, 1.3260 Stop Loss, 1.3175 Take Profit