06.09.201803:02 Forex Analysis & Reviews: Germany and the UK refuse the key requirements for Brexit

The British pound and the euro rose sharply against the US dollar after news came that Germany and the United Kingdom abandoned the major requirements for Brexit. The source of the message is Bloomberg. If this information is reliable, rejection of the major requirements will help achieve the EU-UK trade agreement and prevent serious consequences of Brexit. It should be noted that the UK's withdrawal from the EU is scheduled for March 2019.

The data released in the first half of the day did not support the European currency, although they were quite positive.

The index of supply managers PMI for the euro area services sector in August reached 54.4 points against 54.2 points in July this year. The Compound PMI of the eurozone in August rose to 54.5 points against 54.3 points in July, while economists expected growth to 54.4 points.

The data on the US foreign trade deficit in July this year demonstrated again its most significant monthly growth, and exerted pressure on the US dollar. Evaluating the report, the blockade measures on the part of the White House failed to bring significant change in the deficit.

According to experts, the main reason for the growth of the deficit was the slowdown in the growth of other countries' economies, which showed a negative impact on the export of American goods.

The US Commerce Department said that the trade deficit in goods and services in July rose by 9.5% compared to June and amounted to 50.08 billion US dollars. As noted above, the growth was due to exports, which decreased by 1% compared to the previous month. While imports grew by 0.9%. Economists predicted that the deficit would be $ 50.3 billion.

As for the technical picture of the EUR/USD pair, the buyers coped with the task and returned to the 1.1600 resistance level which was lost yesterday, maintaining the upside potential in the risky assets which was mentioned in the morning review. This situation may lead to the trend resumption, a correction on which has been observed since August 28. The main task for the near future will be the breakthrough of resistance 1.1650, which will lead to the demolition of a number of stop orders and a test of 1.1690 level.

The services data released in the first half of the day in Great Britain had supported the British pound. According to the report, PMI's supply managers index for the UK services sector increased to 54.3 points in August this year, while this index was at the level of 53.5 points in July. Economists had expected PMI for the UK service sector to be 53.9 in August.

* The presented market analysis is informative and does not constitute a guide to the transaction.