Main trading ideas on financial markets for 04.12.2018

The G-20 leaders met in Buenos Aires last weekend to discuss some pressing issues on the global agenda. The main focus however was on the negotiations between the United States and China. We could observe the impact of this meeting when the markets opened last night. First of all, Chinese and US stock exchanges, as well as the US dollar and the yuan, have been obviously affected.

In addition to the summit results, Germany, China, Russia, Spain, France, the United Kingdom are expected to release their market sentiment results today. These data will allow to assess current economic trends in these countries in November and determine future market trends.

Let’s not forget about the Bank of England’s Financial Policy Committee meeting, scheduled on Tuesday. The minutes will provide answers about the upcoming Brexit and shed the light on the future plans of the UK financial regulator. The British pound demonstrates a decline, and we expect the GBP/USD pair to keep trading in a downward direction; the long-term target for this instrument is located at 1.2150 level.

Non-farm payrolls data are being released on Wednesday, December 5. According to preliminary forecasts, November figures will come out weaker than in October. Markets are generally sensitive to negative reports as they are an essential indicator of the Fed’s policy.
The Non-manufacturing business activity index will be published on the same exact day, and the expectations are also negative. Despite the fact that the euro/dollar pair remains in a downtrend, a decrease in the US business activity will indicate depreciation of the dollar.

The Canadian dollar will be the key newsmaker in the Forex market on Thursday, December 6. The USD/ CAD pair has almost reached the ascending channel’s high at 1.335. The pair keeps trading within the uptrend. At the end of the day, Canada will publish its trade balance and business activity indexes. If data turns out disappointing, bearish sentiment may take over.

Now, let’s take a quick look at the oil sector. The OPEC cartel and Russia seem to keep regulating the market situation by adjusting their oil production volumes and decreasing supply. Future production volumes depend on further dynamics of oil prices.

As for the euro/dollar pair, it’s important to note, that the European Union will publish its final GDP growth data in the third quarter of 2018 this week. Both annual and quarterly data are expected with some improvement. There is a good reason to anticipate a bullish momentum in the Euro. The US unemployment rate will be also released in the United States. Market analysts don’t expect any changes, which means that unemployment in November will remain at 3.7%.

To sum up, here are our targets:
the GBPUSD – long-term sell to 1,2150
the USDCAD – sell to 1,2975
the WTI (USOIL) – buy up to $63 a barrel