21.12.201704:06 Forex Analysis & Reviews: The euro continues to grow

The absence of important fundamental data in the first half of Wednesday has reflected in the currency market, which for the most part, was trading in the side channel.

The euro slightly yielded against the US dollar after the release of the report on the decline in the positive balance. However, significant changes in the EURUSD pair did not happen.

According to the report of the European Central Bank, the current account surplus of the euro area's balance of payments in October 2017 was reduced to 30.8 billion euros from 39.2 billion euros in September. Data for September were revised upward, as it was initially reported that the balance in September was 37.8 billion euros.

In the second half of the day, the US dollar continued to lose its positions against the euro, even despite good data on the pace of sales growth in the secondary housing market. According to the report of the National Association of Realtors, sales in the secondary housing market in the US in November this year increased by 5.6% compared with the previous month and amounted to 5.81 million homes per year. Economists had expected a sales growth of 0.7%, to 5.52 million homes per year.

There have also been rumors that US President Donald Trump may postpone the signing of the tax reform law until early next year. It is expected that after approval in the Senate and the House of Representatives, the law mentioned above will be approved by the Congress in the near future. It is likely that this news has placed significant pressure on the US dollar.

As for the technical picture of the EURUSD pair, buyers continue to strive for a new weekly high, climbing above 1.1850, which opens the way for a resistance towards 1.1900 and 1.1930.

Traders reacted calmly to the report of the International Monetary Fund, which pointed to a slowdown in the economic growth of the UK in 2018. In general, such a forecast is not surprising for most experts.

The report points out that in 2018 the growth of the UK economy will slow down to about 1.5%. This is directly related to lower costs for both companies and consumers due to uncertainty corresponding with Brexit.

The IMF attaches great importance to negotiations on trade agreements, which are scheduled for March next year. If consensus is reached, this will lead to a support for confidence and, accordingly, to greater economic growth. If, on the contrary, and everything boils down to the second scenario, a disorderly exit of the UK from the EU occurs, it can lead to a sharp drop in asset value and confidence, which will also affect economic indicators.