24.07.201911:14 Forex Analysis & Reviews: Review of EUR / USD and GBP / USD pairs on 07.24.2019: A complete surprise

Politicians regularly demonstrate an incredible ability to change their opinion immediately after being elected to a particular position; that is what Boris Johnson showed us yesterday, as soon as it was announced that he was becoming the new head of the Conservative Party and the Prime Minister of Great Britain. After all, while the inner-party elections were going on, he tirelessly beat his heel on the chest and swore on blood, unlike the indecisive and weak Theresa May, that he would instantly solve the protracted Brexit issue and in October would bring the United Kingdom to Europe-free navigation. But during his victory speech, he said that October 31 is the most likely date of secession from the European Union, although divorce without an agreement is not a very good way for events to unfold. In other words, Boris Johnson does not exclude the possibility of another transfer of the date of resettlement from the European hostel at the moment. Not to mention it directly, but such a shift in rhetoric clearly indicates that. Nevertheless, the new prime minister reiterated once again that under no circumstances would the UK pay Europe anything. Even if you come to some kind of agreement, it will not work. So, on the whole, the intentions of Boris Johnson did not change much, although they somewhat softened. But as they say, the essence of this does not change as it is clear that the version of the agreement that the new prime minister is comfortable with, is simply unacceptable from the European perspective. After all, according to Boris Johnson, who at least speaks out in public, Europe owes it to Britain. It should be that the United Kingdom itself is simply obliged to maintain free and unhindered access of British business to the European market, and the UnitedKingdom itself can impose restrictive measures on European business in the British islands. Thus, the unregulated Brexit is a little closer and it is not surprising that the dollar has continued to grow steadily against this background.

At the same time, not only the words of the new prime minister but the very fact of Boris Johnson's victory made such a strong impression on investors that they did not pay attention to the decline in housing sales by 1.7% in the secondary market of the United States at all. As if the victory of Boris Johnson was a complete surprise for many.

Honestly, after such a confident step, the dollar is clearly overbought but we have a problem with a reason for a rebound and a local correction. The fact is that preliminary data on indices of business activity in the United States can show continuous growth. In particular, the business activity index in the service sector may grow from 51.5 to 51.7, while the manufacturing business activity index should increase from 50.6 to 51.0. All these will allow the composite index of business activity to show an increase from 51.5 to 52.1. Moreover, despite a serious decline in sales of housing in the secondary market, a growth of 6.0% is expected in the primary market. That is, the Americans do not want to buy old rickety huts but give them new houses.

Hence, it is not possible to count on the help of US statistics of a single European currency. In principle, as well as its own, as preliminary data on business activity indices can show the immutability of the business activity index in the manufacturing sector. However, the services sector is expected to decline from 53.6 to 53.3. As a result, the composite business index should fall from 52.2 to 52.1. Therefore, the single European currency is waiting for a further decline around 1.1125.

The picture is similar for the pound, especially since it will only focus on American statistics due today due to the lack of its own. Therefore, it is worth waiting for a gradual decline in the pound to 1.2400.