Fundamental analytics

US dollar and Brexit uncertainty put pressure on the EUR / USD pair


The EUR / USD pair was trading lower on Monday. The pressure on the price was exerted by the US dollar, whose index for the day strengthened by 0.15%, as well as the results of elections to the European Parliament. In general, many investors are satisfied with the results of the elections, since the majority of the votes were kept by the parties that are in favor of preserving the integrity of the EU. But despite this, the composition of the European Parliament will undergo significant changes, which can significantly complicate the process of making important economic and political decisions in the future.

An important factor of pressure on the European currency remains the uncertainty associated with Brexit. The media reports that the most likely candidate for the post of prime minister after Theresa May’s resignation is Boris Johnson, who is known for his radical views on Brexit. The growth of the likelihood of a UK leaving the EU without an agreement significantly reduces the interest of traders in European and British currencies.

Today in Germany was published the consumer climate index (Gfk). For the month, the figure dropped from 10.2 to 10.1 points, while experts predicted an increase to 10.4 points. This is the minimum level of this indicator since April 2017, which indicates a decrease in consumer optimism about the prospects for the development of the German economy.

In the United States today, the focus will be on data on consumer confidence index CB. Economists predict a growth rate from 129.2 to 130.1 points. Accordingly, stronger data will support the US currency, and values ​​below the forecast will increase the pressure on the dollar, taking into account the weaker economic data released last week.

On the chart, the price returned to the level of 1.1180. While we do not see the reaction of buyers to this mark, which indicates the probable breakdown. In this case, we should expect further development of the downward movement to the level of 1.1145. Accordingly, the scenario with the growth of quotations will be relevant if the price is kept above 1.1180.

· Resistance levels: 1.1215, 1.1260, 1.1320.

· Support levels: 1.1180, 1.1140, 1.1100.

The main scenario - a decline to 1.1145.

An alternative scenario - consolidation above 1.1180 and growth to 1.1215.

The market remains  with moderately negative news background, which contributes to the further development of the downward movement. Therefore, in the short term, we consider selling the instrument from the level 1.1185.



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