On Friday, the US dollar won back a part of the losses of previous trading sessions. The probability of such a scenario was indicated by the signals of technical analysis, which were realized thanks to macroeconomic statistics published at the end of the week on business activity indicators in the leading European economies, which were, on the whole, somewhat weaker than the expectations of the participants.
The biggest drop was seen in GBP/USD, which lost 200 points because of trading on Friday. The weakening of the British pound was the result of information from the summit in Salzburg, at which the leaders of European countries and the Prime Minister of Great Britain said that negotiations on Brexit had reached a deadlock. At the same time, the time to reach an agreement on the withdrawal of the country from the EU is inexorably declining, which leads to an increase in the volatility of the British pound in world markets.
Today is not rich in published statistics. At 11:00 Moscow time we'll see the index of business climate IFO of Germany. Expectations of the markets are at around 103.2 points. Strong statistics of the indicator can provide local support for the euro's quotes after the correction movement on Friday.
Trading on Monday will be held in a calm direction. Oncoming meeting of the Federal Reserve forces players to be cautious. At the end of the week is expected to strengthen the US dollar.
Friday's trading EUR/USD pair started for good health. The quotations reached a resistance near the level of 1.1800, continuing the movement of the previous days. However, the published data on the PMI indicators in the manufacturing sector in Germany and the Eurozone as a whole, turned out to be weak, which led to the beginning of the corrective price movement. The value of the index of business activity in the manufacturing sector in Germany was 53.7 points, which is the lowest value since September 2016. At the same time, the analogous indicator for the Eurozone is at the level of 53.3 points (minimum since November 2016).
As a result, the pair dropped to the area of 1.1735-1.1750, where the quotes stabilized. In the same area prices are in the first hours of Monday.
Despite the update of the highs of the last few months after reaching the mark of 1.1800, the technical picture of the trades indicates the continuing formation of signals of negative dynamics. On the chart, yellow color indicates time intervals in which growing maximums of prices were not accompanied by the update of the corresponding local maxima of the MACD indicator. Thus, in the course of today's and tomorrow's trading, a gradual decline in quotations is predicted until they reach the level of support located in the area of 1.1700.
Zones of support and resistance have not changed compared to Friday and are located in the ranges 1.1710-1.1720 and 1.1780-1.1800, respectively.
GBP/USD
Reports from Salzburg that the negotiations on Brexit had reached a deadlock and a compromise on the issue of the Irish border had not been achieved led to a noticeable drop in the GBP / USD pair's quotes, which fell from just below 1.3300 to 1.3070-1.3080 (a 200-point drop ). Thus, the implementation of technical analysis signals indicating a high probability of such a scenario is recorded.
Today, prices are around 1.3100, slightly regaining Friday's losses. In the conditions of an empty economic calendar and on the eve of tomorrow's meeting of the Fed, a calm course of the trading session is predicted. Quotations of the pair will make fluctuations in the range of 1.3090-1.3180.
The support zone is in the area of 1.3080-1.3110 (green oval).
The resistance zone is present in the range 1.3190-1.3205 (red oval).
The statistics on consumer inflation published overnight turned out to be better than predictions, which indicates the gradual development of inflationary processes in the Japanese economy. This fact should support the Japanese yen, which is under pressure on the background of the ongoing trade confrontation between Beijing and Washington. The probability of the termination of positive dynamics of quotations is indicated by the continuing formation of technical analysis signals. As can be seen from the price chart, updating the local maximums of the pair is not accompanied by a similar process of the MACD indicator.
During Monday-Tuesday, prices are projected to decline in the area around the 112.00 mark.
The support zone is in the area of 112.05-112.25 (green oval).
The resistance zone is located in the area of 112.85-113.05 (red oval).
As noted in the previous overview, the technical picture of the pair USD/CHF indicates an increasing probability for the beginning of positive dynamics from quotations. The decline in prices on Friday to the area around 0.9550 led to the formation of another additional signal (convergence between the local lows of prices and the corresponding values of the MACD indicator). This circumstance makes it possible to suggest that within the next few days it will be possible to observe the strengthening of the American currency in this pair. A trigger for this may be a meeting of the Federal Reserve.
Today, it is predicted that the quotations will be trampling in the area of the 0.9600 mark.
The support zone is in the area of 0.9590-0.9605 (green oval on the chart).
The resistance is located in the range of 0.9665-0.9675 (red oval).
