FX.co ★ Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on December 9

Analysis of transactions in the EUR / USD pair

Disappointing data on EU Q3 GDP left the EUR / USD pair in a narrow sideways channel yesterday. To add to that, the buy signals that appeared in the market proved to be false, therefore, all of them brought losses. After a while though, short positions at 1.2102 managed to reverse the market, but the long positions at 1.2125 pulled it back.

Trading recommendations for December 9

Several economic reports will be published today, one of which is Germany's foreign trade balance. However, its data is unlikely to affect the market much, since traders are more focused on the ongoing trade negotiations.

In the afternoon, data on US wholesale inventories will be released, but it is unlikely to have any effect on the market as well. Most likely, traders will be waiting for the European Central Bank's meeting tomorrow, at which significant adjustments to the economic stimulus program may be made. There are rumors saying that the ECB may resort to verbal intervention, and this will further weaken the position of the euro in the market.

Bad news on Brexit could also lead to a serious surge in volatility, as well as a fall of the euro against the US dollar. Therefore, we must carefully analyze the incoming news before entering the market and trade according to the trend, because guessing the direction of the market is not very profitable today.

• Open a long position when the euro reaches a quote of 1.2138 (green line on the chart) and then take profit at the level of 1.2174. However, growth can only happen if there is good news on the post-Brexit trade deal.
• Open a short position when the euro reaches a quote of 1.2108 (red line on the chart) and then take profit around the level of 1.2065. Do this especially if there is no good news on the post-Brexit trade deal.

Analysis of transactions in the GBP / USD pair

Short positions from 1.3327 did not bring profit yesterday, as there was no downward move in the GBP / USD pair. The decision of UK Prime Minister Boris Johnson to drop his domestic market bill supported the pound, but it was not enough to build a strong bullish sentiment. In the afternoon, short positions from 1.3327 managed to pull the pound down by 35 pips, however, immediately after that, the quote climbed up again.

Trading recommendations for December 9

The pound will continue to move depending on the progress of Brexit negotiations.

Today, Boris Johnson went to Brussels to meet with Ursula von der Leyen to discuss the trade deal, so most likely, a final decision will be made during their dialogue. However, so far, no one seems to be willing to make concessions, but the deadline for negotiations is already near. If the issue on fishing is finally resolved, the likelihood of signing an agreement will increase. On this, demand for the pound will rise, which will lead to a new wave of growth in the GBP / USD pair.

• Open a long position when the quote reaches the level of 1.3391 (green line on the chart) and then take profit around the level of 1.3544 (thicker green line on the chart). Good news on Brexit may strengthen the position of the British pound.
• Open a short position when the quote reaches the level of 1.3350 (red line on the chart) and then take profit around the level of 1.3227. Bad news on Brexit will resume the downward trend in the GBP/USD pair.