Weekly Economic Review

Macroeconomic calendar last week was not rich in important events that may have an affect on the currency market. Consumer inflation in Germany and the Eurozone remains low, that does not give any reason to expect from the European Central Bank to start tightening monetary policy. More, the statements of its representatives, statistical data, as well as the strengthening of the single European currency suggests the opposite, ie, introduction of additional stimulus measures. Thus, all attempts of euro to continue the recovery against the dollar were limited again.

During the week, the euro/dollar remained under pressure, having completed its fall below the 1.1000 to support area of 1.0911. In technical terms, the loss of 1.1000 is an alarming signal for the bulls and assumes fall of the pair towards 1.0800. Also, a negative factor for the euro should be considered the probable British exit from the European Union, which may adversely affect both the economic prospects of the United Kingdom, as well as on the economies of countries in the EU. Surely, in these conditions, expect a stable recovery of the euro/dollar is hardly worth it.

As, of course, and the recovery of the British pound, which, falling against the dollar reached fresh lows at the level of 1.3853. Statements in support of the Mayor of London of "Briexit" deprived the pound/dollar the chance of recovery, obtained thanks to finding by the British prime minister a compromise with the EU. The pair may continue to fall in the direction of the 38th figure, but the bounces towards the psychological level of 1.4000 should not be excluded. In case of strong statistical data on the UK, is possible a quite massive profit fixation, that should be considered by the IAFT traders.

Best regards,

International Association of Forex Traders
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