The European currency continues to test large levels of resistance, which it cannot break as of the moment. At the end of last week, unsatisfactory data from the US led to another attempt by the euro to increase above 1.1650-60. However, this movement ended in failure.
According to the report of the University of Michigan, the indicator of consumer sentiment in the US in November of this year has declined. According to preliminary data, the consumer sentiment index of the University of Michigan in November 2017 stood at 97.8 points against 100.7 points in October. Economists had expected that in November the index would be 100.0 points.
At the beginning of this week, trade is expected to be muted due to lack of important fundamental data.
Preliminary data on the GDP of Germany, Italy and the eurozone will start to appear only on Tuesday. Many experts predict a moderate acceleration of annual growth.
Data on inflation in Germany will also be released on Tuesday, and on the eurozone on Thursday. Analysts expect a slight decline in these indicators both in Germany and in the euro area, which could negatively affect the rate of the European currency.
As for the technical picture of the EURUSD pair, it is not entirely precise to expect strong growth. A consolidation above the large range of 1.1655-1.1675 could lead to a larger upward trend with an update at 1.1720 and a breakthrough towards 1.1760. If the trade moves to the lower range of the lateral channel, which so far is limited to a support of 1.1640, then the pressure on the euro could increase significantly, which will lead to a test of 1.1600 and a larger break in the area of the previous week's lows in the area of 1.1560.
The British pound has significant problems that are directly related to politics.
At the end of last week, it became apparent that the UK has only two weeks to show the European Union that it has reached sufficient progress in negotiations on three issues that concern Brexit. With this address, the chief negotiator for Brexit from the EU Michel Barnier spoke.
Such a date is given precisely afterwards, and that Barnier will also need time for negotiations with European governments. All conditions must be agreed upon for the summit, which will be held on December 14-15.
Furthermore, the pressure on the pound has seriously increased today during the Asian session following news reports that 40 parliamentarians agreed to sign a letter of no confidence in Theresa May.
In the summer of this year, as a result of the elections, the Conservative Party headed by Theresa May lost a majority in the parliament. Recently, the party is surrounded by scandals, which led to the resignation of two ministers this month.
Given that there are no fundamental guidelines for the British pound as of the moment, following the recent rate hike, the entire focus of traders and investors is once again turned towards the direction of politics.
