The demand for the European currency has again sharply decreased, and this is the case when large players play against the market and against the news background. While speculative traders open long positions on the euro based on continued risky asset growth after recent statements by the US Federal Reserve, major players play a completely different game, opening long positions on the US dollar per next market divorce. Who wins in this game, I think everyone understands.
Let me remind you that after the Fed's statements that the prospects for economic growth in the USA in 2019 became less favorable, the European currency, like a number of other world currencies, began its sharp strengthening against the US dollar. But, as can be seen on the graph, not for long.
The data, which came out in the first half of the day for Germany, did not greatly influence the alignment of forces, however, traders took advantage of the moment and recorded part of their long positions in euros.
According to the report of the research group GfK, the mood of German consumers in January of next year, and the indicator is of a leading nature, will remain unchanged. A number of risks, which consist of problems in trade relations with the USA and the Brexit hard scenario, do not allow consumers to look positively into the future.
As indicated in the report, the leading consumer confidence index GfK of Germany as of January 2019 was 10.4 points, remaining at the same level as compared with December. Economists had forecast a decline to 10.3 points. The sub-index of economic expectations fell to 14.1 in December, while the indicator of income expectations rose to 53.8 points.
As for the current technical picture of the EUR / USD pair, all the bearish goals have been fulfilled today, and with the renewal of major support around 1.1402, the demand for the US dollar will slow down, which will lead to the formation of an upward correction in the resistance area of 1.1435, where the trading week may close.
Great Britain
The British pound ignored GDP data and continued to trade in a narrow side channel.
According to a report from the National Bureau of Statistics, in the 3rd quarter of this year, the UK economy grew at an annualized rate of 2.5%, which corresponds to a preliminary estimate. Compared with the previous quarter, the growth was 0.6%, which also completely coincided with the forecasts of economists.
The current account deficit in the UK balance of payments for the 2nd quarter of this year was revised to £ 20.0 billion from £ 20.3 billion. In the 3rd quarter, the deficit increased even more and amounted to 26.5 muzzle pounds, while economists had forecast a deficit in the current account of the UK balance of payments in the amount of 23.3 billion pounds.
As for the volume of borrowed funds of the public sector, then there have been no major changes. As noted in the report of the National Bureau of Statistics, net borrowings of the public sector in November of this year were at 7.2 billion pounds against 8.1 billion pounds a year ago. Economists had forecast that the net borrowing of the UK public sector at 7.8 billion pounds.
The material has been provided by InstaForex Company - www.instaforex.com