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EUR / USD
On December 12, the EUR / USD pair completed with an increase of only a few basis points. However, during the day the instrument made impressive movements both up and down, and then added 45 basis points at once on the night of December 13. However, an unsuccessful attempt to break through the 100.0% Fibonacci level indicates the readiness of the markets to complete the construction of the first upward wave as part of a new upward trend section. If this assumption is correct, then the instrument will begin to decline within the framework of building wave 2 or b from the current positions.
Fundamental component:
On Thursday, the news background for the euro-dollar instrument was quite noticeable. First, a report on industrial production in the European Union was released, which fully met the expectations of the market and showed a decrease of 2.2% y / y. A little later, the results of a two-day meeting of the European Central Bank were summed up, which consisted in the fact that the parameters of monetary policy and the volume of the program for the purchase of assets from the open market (QE) remained unchanged, and ECB head Christine Lagarde was as neutral as possible in her comments and press statements conferences. In addition, the most interesting markets were data from exit polls in the UK, which predict a confident victory for the Conservative Party. The victory with the formation of the "ruling majority" (326 representatives in Parliament or more) is identified with Britain's exit from the European Union until the end of January, as promised by Boris Johnson. Since almost no one doubts that the conservatives won the election, it remains only to find out how many deputies from Tory will be in the Parliament of the next convocation. The more conservatives, the greater the chances of an exit on January 31. There is no doubt that all other parties will vote against the agreement of Boris Johnson when the Prime Minister again puts this issue on the agenda in Parliament. Past votes show that even some conservatives do not approve of Boris Johnson's plan to secede from the European Union. Thus, the greater the supply of votes will be for Boris Johnson, the more likely that the three-year epic of leaving the Bloc will come to an end.
General conclusions and recommendations:
The euro-dollar pair presumably continues to build a new upward trend section. Thus, I recommend buying an instrument with targets near the calculated levels of 1.1233 and 1.1303, which equates to 127.2% and 161.8% Fibonacci, in case of a successful attempt to break through the level of 100.0%. Meanwhile, an unsuccessful attempt to break the level of 1.1179 may lead to quotes moving away from the highs reached.
GBP / USD
On December 12, the GBP/USD pair lost several basis points during the day, but tonight, it gained 316 points in a matter of hours. However, the euphoria of the market is slowly decreasing and the instrument quotes are moving away from the highs reached. Moreover, estimated wave 3 or C may complete its construction near the Fibonacci level of 200.0%. If this is true, then either the construction of a new bearish section of the trend will begin, or waves 4, b, 5 in the upward part. One way or another, a certain rollback should happen.
Fundamental component:
On Thursday, there was no news background for the GBP/USD instrument, and markets were eagerly awaiting the first vote counting results. They waited and waited. At night, the British pound gained more than 300 basis points, as soon as information appeared that the Conservative Party would defeat the Labor Party and other participants in the race by a wide margin, it would form a majority in the new Parliament without problems and, accordingly, would now complete Brexit unhindered. At the same time, it is expected that Conservatives will gain about 370 votes, which is significantly more than half of the total number of parliamentarians. Labor, in turn, will lose about 70 deputies, and their total number will be about 190 deputies. Thus, the pound is now only paying attention to the news about the elections and, most likely, it will not pay any attention to the report on retail sales in America, which will be released in the afternoon. All of today will be devoted to counting votes, followed by interviews with all party leaders who fought among themselves over the past two months. Today, it is logical to expect a decline after an overnight increase in the instrument. This option also implies the current wave marking.
General conclusions and recommendations:
The pound / dollar instrument continues to build an upward trend. I recommend considering new purchases of the instrument with targets around 1.3823, which equates to 261.8% Fibonacci, after quotes roll back down and after a new successful attempt to break through the Fibonacci level of 200.0%. The fulfillment of this condition will show the readiness of the currency market for new purchases of the pound.
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