It seems that everyone was so accustomed to the fact that political scandals, intrigues, and investigations rule the show in the first couple of days of the week, that it was not possible to switch from this exciting topic to boring macroeconomic statistics in one day. For example, the pound has been declining since the early morning not because it is overheated and overbought. It's all about the official statements that London will not be able to sign any trade agreement this year. However, this is not about an agreement with Brussels, but only with Washington. Yes, the UK is still preparing for Brexit. More precisely, it is preparing to finally leave the EU. And for this to happen, it is necessary to sign new trade agreements not only with Brussels, but also with other countries, since they were previously regulated within the framework of the same European Union. And so it turns out that Great Britain is not keeping up. After all, Brexit will finally happen only on January 1 of next year. But so far, there is not a single full-fledged trade agreement and everyone is so worried about this, as if no one had warned about it even before the very referendum. It is clear that many countries have used this situation in order to try to throw British capital out of their market. So to speak, everything is aimed at reducing competition from foreign capital. And the goal is only one - to try to give more benefits to their own companies. But politicians of all stripes did nothing but keep repeating that all trade issues would be resolved from day to day, which has been going on for several years. Now, it is already openly talked about that a trade agreement with the United States will only be signed next year, and the whole trick is that if London does not keep pace before the end of the year, then British business, and with it the economy of the United Kingdom will suffer serious losses in any case. Due to this, some markets may be lost forever and it doesn't matter if the trade agreement is signed in February or March. Yes, even on January 2. The UK is still in a weak position. That is why the pound was declining, but only up to a certain point.
The single European currency calmly watched everything that happened, and then rose. And this is despite its excessive overbought, because of which everyone is just waiting for the moment to organize a full-fledged correction. So it went up and took the pound with it, which is due to the news that came from the same United States. Donald Trump has finally found the reason for China's soaring power. It turns out that the whole thing is in the Chinese spies who have flooded America. Yes, it is precisely the need to drive evil communist spies out of the Citadel of Democracy that explains the sudden decision to close the Chinese Consulate in Houston. They say that they were engaged in the theft of space technologies there, which explains China's success in space exploration. At this rate, Washington will soon dust off Senator McCarthy's eternal due process. But the funny thing about all this is that such patriotic actions are quite poorly received by investors. They are well aware that the United States is playing the role of the weak in this game. It is trite for the simple reason that the Chinese economy is already noticeably larger than the US economy. That is, China's retaliation will cause much greater economic damage to the United States.
We must admit that the dollar strengthened slightly towards the end of the trading day, and the very same economy became the bottom for this. It is recovering, however, it is not as dynamic as we would like. Home sales in the secondary market rose not by 23.0%, but by 20.7%. But worst of all, house prices, which were supposed to rise by 0.4%, suddenly dropped by 0.3%. Yes, positive processes are visible. But they are clearly not that stable. So at the moment, the United States should not get involved in another adventure with all kinds of trade wars since they can be costly for the US economy.
Existing Home Sales (United States):
Let's hope that there will be no political circus today and market participants can finally calmly look exclusively at macroeconomic statistics. Moreover, the market has long needed an excuse to correct and correct imbalances. That is, the dollar needs to slightly strengthen. In turn, the market is a little overheated and the very same macroeconomic statistics is designed to give this very reason in the form of a further improvement in the situation in the American labor market. Thus, the number of initial applications for unemployment benefits should be reduced from 1,300 thousand to 1,295 thousand. But it is much more important that the number of repeated applications for unemployment benefits may decline from 17,338 thousand to 17,100 thousand. According to forecasts, the labor market continues to gradually recover, which is pleasing.
Repetitive Unemployment Insurance Claims (United States):
The euro/dollar currency pair, during high speculative activity, managed to update the annual maximum, raising the quote to 1.1600. It can be assumed that such a rapid strengthening of the European currency could lead to its overbought, due to which a correctional movement in the direction of 1.1500-1.14.50 may occur.
The pound/dollar currency pair managed to stop and form a consolidation within the area of 1.2720/1.2745 after an impulsive up/down price movement. Based on the general oversold situation in the US dollar, it can be assumed that the market has not corrected strongly enough and the price is still likely to decline to the level of 1.2620.
