EUR / USD
At the Friday, rapid movement upward characterized auction for the European currency. Having started the trading session at 1.1345, by the end of the day the EUR / USD pair was trading at the level of 1.1410, at which the flat occurred. Thus, despite the renewal of annual lows last week, on Friday there was an attempt to correct the market.
The performance of Mario Draghi, the head of the European Central Bank, had a positive impact on the European currency. His speech reassured traders about the prospects for the euro. The weakening of the dollar against the news of the US-China trade war also became an impetus for the pair to grow.
Macroeconomic indicators determined the dynamics within the pair. On Friday, traders responded to the Eurozone inflation report for October. Experts expected that the consumer price index will remain unchanged at 1.1%. This coincided with the actual figures and was positively perceived by the market. Italian consumer price index data became an unexpected, but a stimulating factor for the growth of the euro: given the predicted value of -0.4%, this index was 0.0%.
American statistics failed to outweigh the negative effect of the news agenda. Despite the fact that the utilization rate of production capacity was higher than expected, industrial output showed a decline for the fourth month in a row from 0.2% in the past period to 0.1%.
On Monday, volatility may increase within the EUR / USD pair with a mainly downward trend due to the Italian crisis and testing of support levels of 1.1390, 1.1375 and 1.1360.
GBP / USD
Quotes of the pair GBP / USD rose at the end of the trading week. The move started from 1.2785, and by the end of the trading session, the pair moved to the level of 1.2830. At the same time, the local resistance level of 1.2870 was broken at the auction, which was accompanied by a rollback.
The positive trend is due to sales of the US dollar related to the recovery in the stock markets, and news regarding the trade war between the US and China.
Despite Friday's growth of the pound, which leveled the consequences of the news of the resignation of Dominic Raab, Minister for the exit of the UK from the European Union on Thursday, Brexit remains the determining factor in the dynamics of the British currency. So, Tuesday is expected to vote on a vote of no confidence in Teresa May, the British Prime Minister, by the parliament, which will begin to recoup the market at the beginning of the week. In addition, the negotiator on the issue of Brexit is still not appointed, which contributes to the overall political instability.
Macroeconomic indicators also play against the pound. Published last week, data on unemployment and the decline in retail sales show a systemic crisis associated with Brexit.
Monday is scheduled for publication of the Rightmove housing price index. Recently, statistics on the housing sector has been the weak link of British macroeconomic indicators. Thus, the upcoming release may affect the pound in a negative way.
Today, I expect a corrective depreciation of the pound against the dollar due to pressure on the British currency on the background of news about Brexit to support levels of 1.2810, 1.2785 and 1.2770.
ATTENTION! This article cannot be considered as investment advice! Always remember that investments in currencies are associated with increased risk and any investment should be approached very carefully. Just pay your attention that the responsibility for making a decision lies only with you. Please consider all these risks when evaluating currency-related investments. Invest in currency only the money that you can afford to lose.
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