The European currency rose in the first half of the day against the US dollar, but then the upward momentum slowed down in the region of large resistance levels, which I spoke about in more detail in my morning forecast.
Given the absence of an important fundamental statistic, it seems that the growth of the euro was due to the reaction of traders and investors to the fact that the new prime minister of Italy could be a person still far from politics, and without the populist views that many are so afraid of.
As it became known, the leading parties "Movement of Five Stars" and "League" put forward for the post of Prime Minister Giuseppe Conte. Conte is known as a scientist and a lawyer and has virtually no political experience. However, it is too early to say that he will become prime minister since the appointment of the president of Italy is required for his appointment.
As for the technical picture of the EUR / USD pair, the main task of the buyers of the European currency remains the breakthrough of resistance level 1.1820, above which it will be possible to speak with more confidence about the continuation of the upward correction in risky assets, with the renewal of the highs of 1.1850 and 1.1890.
The British pound rose strongly against the US dollar after a representative of the Bank of England said interest rates would gradually increase over the next few years, even though at a May meeting, committee members had predicted that interest rates would rise slightly later. The representative of Bank of England is confident that you can wait a few more months without further problems before further tightening monetary policy.
With this approach, and the head of the Bank of England, Mark Carney. In his opinion, it is necessary to wait for a little for the restoration of momentum before raising the rates. Signs of recovery of momentum may occur within a few months, which will correspond to the benchmarks of the Bank of England and will allow making certain conclusions in the direction of further increases in rates.
Data released on public sector borrowings in April this year, slightly affected the British pound, although slightly slowed his upward momentum.
According to the report of the statistics agency, net borrowing of the UK public sector in April this year fell by 1.1 billion pounds against the growth of 1.3 billion pounds for the same period in 2017. The net public sector demand for cash in the UK increased by only 3.7 billion pounds in April against 30.6 billion pounds a year ago.
Everything can slow down the economic growth that the regulator so expects in the near future.
The material has been provided by InstaForex Company - www.instaforex.com