The euro/dollar pair on Monday on growing volumes turned down, breaking through the support level of 1.2000, which indicates that investors returned to the market before the Christmas holidays at the end of the year.
The pair, in our opinion, is declining on a more global problem for it, which is that its further growth will cause the ECB negative emotions, which can be expressed in that it starts signaling the desire not to rush with a change in the monetary policy policy, fearing that the excessive strengthening of the euro's position will have a negative impact on the ability of European commodity producers to compete in world markets. Therefore, this is one of the likely reasons that forces speculators who bought the euro at the end of last year to sell it.
The euro did not even help positive data on the euro zone economy on the first day of the new week. The published figures for retail sales in the euro area showed an upward trend of 1.5% in November, with an expected increase of 1.4% against the negative October value of 1.1%. Sentix investors' confidence index, consumer confidence and business climate were also good, with the first indicator clearly supporting the euro with its growth to 31.5 points in January against the December value of 31.1 points. But this did not happen, which indicates the reality of our assumptions. Although, objectively speaking, we also do not expect that the euro will fall significantly. Most likely, the main currency pair after the downward correction will continue to consolidate in the lateral range, not receiving both appreciable support, and not fall under the strong negative influence. About the reasons for this prospect, we have repeatedly written in our articles and comments.
Forecast of the day:
The EUR/USD pair overcame the 1.1950 mark, which may become the reason for its local decrease to 1.1900 if the pair gets below this mark.
The GBP/USD pair is consolidating in a wave of lack of certainty in the issue of resolving disputes over Brexit between the UK and the European Union. From a technical point of view, the pair has a potential for a local fall to 1.3450-55 after breaking through the 1.3500 mark.
