The British pound ignored Theresa May's victory yesterday, and the euro continued to decline gradually against the US dollar amid weak fundamental statistics on inflation, which binds the hands of the European Central Bank.
Great Britain
After a disastrous vote on Brexit in the British Parliament, Labor Party leader Jeremy Corbyn initiated a vote of no confidence due to the ineffectiveness of the government in agreeing to a British exit from the EU. As it became known, British Prime Minister Theresa May yesterday won this vote. May won with 325 votes for and 306 against. However, the market reaction was very restrained on this news, and GBP / USD remained bargained in the side channel. Now the British Prime Minister has until January 21 to prepare an alternative version of the Brexit deal, since it is clear that the old version will not exactly pass the parliament even on the second ballot.
Many experts and politicians expect that ultimately the UK's exit date, scheduled for March 29, will be changed, giving the government more time to negotiate a number of concessions with representatives of the European Union.
As for the technical picture of the GBP / USD currency pair, for the new powerful impulse growth, a breakthrough of the resistance area of 1.2890-1.2900 is required, which will lead to the formation of a new trend with the updating of monthly highs of 1.3020 and 1.3130. If in the near future the bulls fail to get above the range of 1.2890-1.2900, a downward correction in the trading instrument is likely, which will return the pair to the lows of 1.2750 and 1. 2620.
USA
The data, which came out yesterday in the US, did not put pressure on the US dollar, which retains an advantage in a pair with the euro.
According to a report by the US Department of Labor, the cost of imported goods in the United States declined this December. The fall was due to lower oil prices.
Thus, import prices in December fell by 1.0% compared with the previous month, while economists had expected prices in December to fall by 1.5%. As I noted above, the decline is entirely due to oil prices, which in December fell by 11.6% after falling 16% a month earlier. Excluding energy, import prices rose by 0.3%. Compared to the same period of the previous year, import prices fell 0.6%.
Data on the mood of home builders in the United States also did not attract the attention of traders.
According to a report by the National Association of Home Builders NAHB, the housing market index in January 2019 rose to 58 points from 56 points in December, while economists predicted that in January, the index would be 56 points. The NAHB noted that the mood of homebuilders has improved due to a slight decrease in mortgage rates for US residents.
Yesterday another representative of the Fed spoke. Esther George said that the Fed should be more patient in raising interest rates to avoid overheating and prolonging economic growth, and recent market volatility is a factor in the spotlight that should induce a pause in the rate hike cycle.
As for the technical picture of the EUR / USD pair, the bears are trying to resume the downward movement in the market after the unsuccessful attempt of the bulls to return to the game. A break of 1.1375 may lead to a larger decrease in risky assets with the upgrading of 1.1340 and 1.1310 lows. In the case of another false breakdown in the area of 1.1375, bulls can willingly return, which will lead to a powerful upward impulse with a test and a breakthrough of the intermediate resistance of 1.1415 and the main goal of updating the maximum of 1.1450.
The material has been provided by InstaForex Company - www.instaforex.com