The US dollar continued to strengthen its positions against the euro, despite the drop in consumer confidence, which was mainly due to the trade warrior who unleashed US authorities against a number of other states, especially against China.
However, given the fact that the data slightly divided with the forecasts of economists, which predicted a decrease in consumer confidence, the market took the news as "due".
Other data, released on Tuesday afternoon, also indirectly affected the market.
According to the report, the growth of house prices in April this year in the US has slowed. This is directly related to the growth of interest rates on mortgages, which affected the consumer demand. According to the Case-Shiller report, the national housing price index in the US rose by only 6.4% in April compared to the same period of the previous year after growing in March by 6.5%.
The housing price index for 10 megacities rose by 6.2% compared to April 2017, while the index for 20 megacities increased by 6.5%. Economists predicted an acceleration in house price growth by 6.8% in April.
Production activity in the area of responsibility of the Federal Reserve Bank of Richmond grew in June due to the growth of supply indicators, new orders, and employment. According to the data, the production index of the Fed-Richmond was at the level of 20 points in June this year against 16 points in May.
As I noted above, the confidence of American consumers decreased in June. The decline in optimism about the economic outlook will put pressure on the growth rate of the US economy in the future.
According to the Conference Board report, the consumer confidence index in the USA 2018 dropped to 126.4 points in June from 128.8 points in May. Economists had expected the figure to be 128.1 points. The index of current conditions in the US did not change in June.
As for the technical picture of the EUR/USD pair, everything indicates a continuation of the euro's decline in the short term. The breakthrough of the large range of supports in the area of 1.1620-1.1630 will lead to a new wave of sales of risky assets, with the renewal of lows in the area of 1.1570 and 1.1530, from where buyers will try to return to the market. To form a new upward trend, bulls will need to return to the resistance level of 1.1680 in the near future. If this does not happen, pressure on risky assets will only increase.
The British pound is also down against the US dollar, despite yesterday's positive statements by Bank of England spokesman, Ian McCafferty. According to the committee member, there are all signs of economic recovery in the UK after the unsuccessful 1st quarter. McCafferty also believes that the Bank of England should not be dragged out with an increase in the key interest rate, but current prospects are indicative of moderate rate increases in the coming years.
The material has been provided by InstaForex Company - www.instaforex.com