The European currency is gradually strengthening its position against the US dollar against the background of good data on retail sales in the eurozone, which was mainly provided by Germany. Regular unsuccessful negotiations between Donald Trump and the leaders of the Democratic Party on the issue of resuming the work of the government are putting pressure on the US dollar.
As it became known today, President Donald Trump, after meeting at the White House, did not find a common language with the leaders of the Democratic Party. The main problem in coordinating government spending is financing the construction of a wall on the border with Mexico.
Donald Trump said that the work of the government will not resume until the issue of building a wall is resolved. Let me remind you that the activities of state structures were completely suspended at the end of last year, and already this week a number of officials may remain without paying wages.
Donald Trump also noted that he and the Democrats are on the same side in discussions regarding the suspension of government work, expressing the hope that the suspension will last no more than a few days.
The US President also created a special group responsible for the construction of the wall at the border, which will hold a meeting at the weekend.
As I noted above, retail sales data supported the euro.
According to the report, the strongest growth in November 2018 was observed in Germany, where retail sales rose immediately by 1.4%, which supported the overall growth rate in the eurozone at a fairly high level. This suggests that the pace of the bloc's economy at the end of last year may be better than forecasted.
As stated in the official report, retail sales in the eurozone in November increased by 0.6% compared with October. Compared to November 2017, sales increased by 1.1%. Economists had expected that in November, compared with October, sales will show an increase of only 0.2%.
Report on a sharp decline in orders in the manufacturing sector in Germany remained unattended market. According to the data, in November 2018, compared with October, orders decreased by 1% immediately, while economists expected them to decrease by 0.4%.
As indicated in the report, the main reduction was due to a fall in export orders by 3.2%, which was partially offset by an increase in orders in the domestic market by 2.4%.
The technical picture in the EUR / USD currency pair remained unchanged compared with the morning forecast. A further upward trend is limited by the intermediate resistance level in the region of 1.1450, a breakthrough of which will strengthen the demand for the euro, which will lead to a test of new highs in the 1.1480 and 1.1520 regions. Also, we should not forget about the downward correction, to work out the lower boundary of the ascending channel, which is located in the area of 1.1370.
The British pound, meanwhile, is aiming for its monthly highs, but the upward trend will clearly depend directly on Brexit news. Let me remind you that this week the British Parliament will begin a discussion of the Brexit plan proposed by Prime Minister Theresa May. Any negative news that lawmakers remain against this plan could again lead to a big sale of the pound.
The material has been provided by InstaForex Company - www.instaforex.com