The euro remains in the side channel in tandem with the US dollar after yesterday's data on the American economy, whose growth in the 1st quarter of this year was revised down. But even despite this, the US economy in the 1st quarter grew at a fairly high pace.
According to the US Department of Commerce, GDP grew at an annualized rate of 3.1% in the first quarter of 2019, while it was originally stated at 3.2%. Economists had expected a revision of GDP growth to 3.0%.
Let me remind you that back in the 4th quarter of 2018, the growth of the American economy was 2.2%. Compared to the same period last year, GDP in the 1st quarter grew by 3.2%.
Despite the fact that consumer spending and export growth has been revised upwards, data on company spending and inventory investment have been revised downward. Consumer spending in the 1st quarter increased by 1.3%, while exports increased to 4.8%.
Weekly data on the labor market did not worry traders much. According to a report by the US Department of Labor, the number of initial claims for unemployment benefits rose by 3,000 in the week from May 19 to May 25, reaching 215,000. Economists had expected the number of applications to be 215,000. The moving average in the reporting week fell to 216,750. The number of secondary claims for the week from May 12 to 18 fell by 26,000 to 1,657,000.
Weakness in the US housing market continues to persist. This is evidenced by yesterday's report on the number of signed contracts for the sale of housing, which in April of this year has decreased.
According to the National Association of Realtors, the index of signed contracts for the sale of housing in April fell by 1.5% compared with the previous month, reaching 104.3 points. Compared with April 2018, the index fell by 2%. Economists had expected the index to grow by 0.9% in April.
As for the technical picture of the EURUSD pair, it remained unchanged. Buyers of risky assets still need a break of 1.1143 resistance, which will allow them to count on an upward correction in the area of highs 1.1170 and 1.1200. Under the scenario of a breakthrough of yesterday's minimum in the area of 1.1117, the pressure on the trading instrument will increase, which will lead to the test of support 1.1080 and 1.1030.
The British pound remains in a narrow price channel with the prospect of further decline. After the British Prime Minister Theresa May announced her resignation last week, the risk of a British exit from the European Union without an agreement increased significantly. This "ties the hands" to the Bank of England, which may refuse to further increase interest rates this year, even despite the possibility of inflation going beyond the target level. According to a number of experts, the probability of a UK leaving without an agreement has increased to 40%.
