Konstantin Boykachev

CEO Proforexea LLC

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Konstantin Boykachev

CEO Proforexea LLC

Honest Coder

Professional Trader

Blog Post

EUR and GBP: the next talks about the results of the Brexit agreement supported the euro and pound

September 22, 2018 Analytics

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The latest news that the EU and the UK are moving in the right direction to reach an agreement on Brexit as quickly as possible led to the growth of risky assets, including the euro and the pound against the US dollar, which allowed monthly maximum to be updated in the currency pairs EUR / USD and GBP / USD.

Brexit

The statements made yesterday by EU representative Donald Tusk were aimed at the need to achieve maximum progress in negotiations on Brexit in October this year. According to his forecasts, both countries will approach the final stage of the talks in November. According to Tusk, the main emphasis in the joint statement on ties after Brexit should be made on the clarity of all the conditions and rules that will be strictly followed in the future.

On the same day, following Tusk’s speech, British Prime Minister Theresa May said that the UK is working to reach an agreement on Brexit by October this year.

Let me remind you that the leaders of the European Union rejected the proposal of the British Prime Minister concerning economic relations with the bloc after Brexit. In the EU, they do not consider it necessary that after Brexit a new trade agreement between the EU and Great Britain creates a threat of undermining the internal market of the bloc. The UK government, on the contrary, is trying to gain unhindered access for British companies to industrial goods markets and EU farmers’ markets.

Fundamental Statistics

Yesterday, a number of fundamental reports on the US economy came out, which did not provide serious support to the US dollar.

According to the US Department of Labor, the number of Americans applying for unemployment benefits has declined. For the week, from September 9 to September 15, the number of initial applications for unemployment benefits decreased by 3,000 and amounted to 201,000. Economists had expected the number of applications to be 210,000.

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Production activity in the area of responsibility of the Federal Reserve Bank of Philadelphia in September increased. The growth is directly related to the increase in new orders and supplies. According to the report of the Fed-Philadelphia, the index of business activity in September 2018 rose to 22.9 points from 11.9 points in August, while economists expected that the index in September will be 15 points.

Data on the housing market were ignored by traders. According to the report of the National Association of Realtors NAR, sales in the secondary housing market in the US in August this year remained unchanged, amounting to 5.34 million homes per year. Economists had expected that sales would amount to 5.38 million in August. Compared to the same period of the previous year, sales in August fell by 1.5%.

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Technical picture EUR / USD

As for the technical picture of the EUR / USD currency pair, the upside potential will be limited, as the market is in overbought stage. The formation of a false breakout at the highs of this month 1.1790 may lead to a larger downward correction in risky assets. It is best to consider new long positions after the major support levels in the 1.1740 and 1.1715 areas have been reduced and updated.

The material has been provided by InstaForex Company – www.instaforex.com

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