21.09.201807:24 Forex Analysis & Reviews: EURUSD: Mario Draghi has made an important proposal to strengthen the eurozone

The European currency remained trading in a wide side channel, not receiving support from major players after the attempt to break the resistance in the area of 1.1725, which led to a rapid decline in risky assets and the update of the lower limit of the channel of 1.1650, but more on this below.

Fundamental statistics

The fundamental data released on Wednesday in the afternoon were generally ignored by the market.

According to the report of the European Central Bank, the current account surplus of the eurozone balance of payments in July this year decreased to 21 billion euros from 24 billion euros in June. However, for the year, the aggregate current account surplus of the eurozone balance of payments rose to 3.5% of GDP from 3.3%.

The U.S. current account deficit of the U.S. balance of payments in the 2nd quarter of this year was noted, which decreased due to an increase in exports of goods and services.

According to the U.S. Department of Commerce, the current account deficit of the balance of payments decreased to $101.46 billion against $121.17 billion in the 1st quarter of this year. Economists had expected the deficit to be $103.2 billion.

It should be noted that Chinese authorities have repeatedly drawn attention to the fact that they need to focus not on increasing trade duties in the trade war with the United States, but on limiting imported services affecting the main sectors of the economy, including financial and intellectual ones. If China responds in this way, a trade war could take on a very different character.

On Wednesday a separate data was also released, which indicated that the bookmarks of new homes in the US in August 2018 increased. This happened due to the growth in the construction of apartment buildings.

According to a report by the US Department of Labor, the number of housing starts increased by 9.2% compared to the previous month and amounted to 1.282 million homes per year, while the number of building permits fell by 5.7% to 1.229 million homes per year. Economists predicted growth of housing starts of 5.3% and a decrease in building permits 0.8% in August.

Mario Draghi and proposals to strengthen the eurozone

From the evening speech of European Central Bank President Mario Draghi, we can note an important statement that the eurozone needs a new sizeable instrument to stabilize the economy during the crisis.

It is about the creation of a common fiscal tool by eurozone governments that will help protect their economies in times of future crises. Draghi believes that the new fund should be large-scale and aimed at curbing the risks of moral hazard of other member countries.

I would like to remind you that the French President Emmanuel Macron has recently made an almost similar proposal, which promoted the creation of a significant general budget for the region.

The technical picture for the EUR/USD pair

As for the technical picture of the EUR/USD pair, buyers on Thursday will again strive for the upper border of the side channel located in the area of 1.1725-1.1730, where I recommend to look at short positions. In the event of a decrease in risky assets, support will be provided by the same range of 1.1650-1.1655, where you can count on euro buyers to return to the market.