Trading plan for July 26, 2013
Yesterday’s meeting between Donald Trump and Jean-Claude Juncker was the reason for a slight weakening of the dollar. The fact is that after it the media reported that the US president and the head of the European Commission were able to agree on reducing the tension on the issue of trade relations. Allegedly, they were able to agree on mutual lowering of customs duties, as well as on increasing exports from the US to Europe. In particular, it was a question of purchases of American liquefied gas. However, the growth of the single European currency, and in the wake of it and the pound was rather restrained, as no specific statements were forthcoming, and the indicated agreements are more likely to be more beneficial to the US than to Europe. So it’s too early to draw any conclusions. At least until the relevant agreements and decrees are signed.
If you look at the statistics, the dollar should have been cheaper yesterday, it just happened with a delay, in anticipation of the outcome of the meeting between Donald Trump and Jean-Claude Juncker. Although the growth rate of consumer lending in Europe remained unchanged, sales of new homes in the US fell by 5.3% with a forecast of a decline by 2.8%. Another negative factor for the dollar and positive for the pound were data on mortgage lending in the UK, as the number of approved mortgages increased from 39,528 to 40,541.
It is expected that the total number of applications for unemployment benefits in the US will decrease by 13 thousand. And if the number of initial applications for unemployment benefits should increase by 8 thousand, the number of repeated applications can be reduced by 21 thousand. Also, orders for durable goods grew by 3.0%. But none of this is of interest to anyone, since ECB’s policy on monetary policy will be held today, after which a press conference with Mario Draghi is scheduled. Given the rumors that leaked in the media about the agreements between the US and Europe, the ECB head will wait for statements that the risks of a trade war are not significant, and this will not affect the plans of curtailing the quantitative easing program. In other words, Mario Draghi must cut down where under no circumstances after December they will not renew this program. This is the only thing that can contribute to the growth of the single European currency, which will drag the pound behind it. However, the probability of this is extremely small, since Mario Draghi has the ability to say a lot about anything. Any other of his statements, other than mentioned above, it will inevitably lead to a strengthening of the dollar.
The EUR/USD currency pair has once again returned to the range of the 1.1720 / 1.1750 where it felt a periodical resistance. Probably assume that due to the information background, the price will return back to the limits of 1.1650 level.
The GBP/USD currency pair, having reached the periodic level of 1.3200, formed a deceleration in the form of two-digit candles. It is possible to assume that in the case of working off the level and loss of bullish interest, the price will again return to the limits of the value of 1.3150, where previously stagnation has been formed.