The European currency continues to trade in a narrow side channel paired with the US dollar against the background of weak statistics for the eurozone, which does not allow the bulls to resume an upward correction. On the other hand, the suspension of the work of the US government, which lasts for the fourth week, pushes investors away from buying the American dollar.
Yesterday, Speaker of the US House of Representatives Nancy Pelosi said that a vote on bills that would help resume the work of the US government is scheduled for next week. This was done in order to complete the suspension of the work of the government as soon as possible since it brings great harm to the American economy.
In turn, US President Donald Trump reiterated that the Americans need a strong border with Mexico in the form of a wall since nothing else will work. He once again urged the Democrats to do what was right for the country, which signaled the lack of progress in resolving the problem of suspending the work of the government.
The speeches of representatives of the Federal Reserve System, which took place yesterday afternoon, did not greatly affect the quotes of the US dollar.
Deputy Chairman of the US Federal Reserve, Randal Quarles, said that current economic data is very strong, and therefore the baseline scenario assumes that the economy will remain strong. A good economy can reduce risks in the financial sector, which showed instability at the end of last year. According to Randal Quarles, a slowdown in global economic growth may well be short-lived if the United States and China are able to negotiate with each other.
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 British pound rose slightly against the US dollar yesterday, but a further upward trend is hardly possible. Traders positively perceived the proposal of the British Parliament member Nick Boles to block Brexit without a deal. This will force Prime Minister Theresa May to ask for a postponement of Brexit, since her revised plan, which she must prepare by next Monday, will not be approved in time.
A mild scenario with a postponement of the UK exit from the EU could support the British pound in the short term.
The material has been provided by InstaForex Company - www.instaforex.com