05.06.201823:07 Forex Analysis & Reviews: The growth of the UK economy resumed

Weak data on the euro area in the first half of the day hurt the European currency, which again failed to gain the right move to get beyond the large resistance levels paired with the US dollar, which were formed yesterday.

The report on the budget deficit of France partially supported the euro only.

According to the data, the budget deficit of France for the first four months of this year decreased compared to the same period in 2017.

Thus, the budget deficit amounted to 54.3 billion euros at the end of April this year against 57.9 billion euros at the end of April 2017. As noted in the report of the Ministry of Finance, the deficit was reduced as a result of a sharp decrease in costs, as well as the recapitalization of energy companies. It should be noted that tax revenues have also decreased.

As I noted above, retail sales in the euro area were the main reason for the decline in the European currency in the first half of the day.

According to the data, in April of this year, retail sales in the euro area grew by only 0.1% compared to March, where data were revised up to a growth of 0.4%. Compared to the same period in 2017, retail sales grew by 1.7% against growth by 1.5% in 2017. A weak sales report is likely to affect the eurozone's GDP in the second quarter of this year, which will have a negative impact on the European currency in the medium term.

Today, for the first time, a new Italian Prime Minister, Giuseppe Conte, delivered a speech before the senate, who said that the main economic indicators will be achieved not through a strict economy, but through economic growth, which will also reduce public debt.

Conte also said that Italy will introduce a minimum hourly wage and universal basic income. He also noted that the taxation system will be simplified and become fairer.

As for the technical picture, it did not change much in comparison with the morning forecast. The pressure on the euro is maintained, which gradually returns the trading instrument to important levels of support in the area of 1.1620.

The British pound grew strongly against the US dollar after a report that showed that activity in the UK services sector grew in May this year, giving a good boost to economic growth after weakening at the beginning of the year.

According to the research company IHS Markit, the index of supply managers for the service sector in May rose to 54.0 points from 52.8 points in April. Let me remind you that the index values above 50 indicate an increase in activity.