04.12.202011:31 Forex Analysis & Reviews: Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on December 4

Analysis of transactions in the EUR / USD pair

Yesterday, long positions at 1.2130 raised the euro up by about 30 pips, however, the weak data on the euro area's services sector pushed the currency down again. Good thing though that the bulls managed to regain control of the market, so the euro was able to reach a new high, thereby maintaining the upward trend. To add to that, data on US Service PMI put pressure on the dollar, however, it did not result in a movement towards the 22nd figure.

Trading recommendations for December 4

A report on US non-farm payrolls will be published today, which will most likely show a decreased unemployment rate this November. But given the fact that COVID-19 incidence in the country is rapidly increasing, there is a high chance that more restrictive measures will be introduced, which will ultimately affect the indicators in the future. However, those measures plus the recently-approved $ 900-billion bailout package will surely support the market.

Fed representatives will also deliver important speeches, but only bad news on Brexit can harm the euro today.

• Open a long position when the euro reaches a quote of 1.2166 (green line on the chart) and then take profit at the level of 1.2219. However, growth can only happen if data on the US labor market comes out worse than the forecasts.
• Open a short position when the euro reaches a quote of 1.2139 (red line on the chart) and then take profit around the level of 1.2078. However, do this only if data on the US labor market is better than expected, and if the risk of not signing a post-Brexit trade deal increases.

Analysis of transactions in the GBP / USD pair

The pound grew very sharply yesterday, moving up by more than 70 pips from 1.3405 to a price level of 1.3484. It was the rumors that the UK and the EU may soon conclude a trade deal that supported the currency, as was the good performance in the services sector, which, in November, contracted lesser than previously expected.

Trading recommendations for December 4

The pound will continue to move depending on the progress of Brexit negotiations. If the issue on fisheries is finally resolved, the chances of having a post-Brexit trade deal will increase, which will raise demand for the British pound, thereby leading to a new wave of growth in the GBP / USD pair. But if it is announced again that both parties failed to make any concessions, the pressure on the currency would increase, which will result in another decline in the GBP / USD pair.

In another note, a very important report on the US non-farm sector will be published, and it may give more support to the British pound, provided that its data is worse than the forecast of economists.

• Open a long position when the quote reaches the level of 1.3471 (green line on the chart) and then take profit around the level of 1.3560 (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 1.3433 (red line on the chart) and then take profit around the level of 1.3322. Bad news on Brexit will resume the downward trend in the GBP / USD pair.