04.01.201802:29 Forex Analysis & Reviews: Traders are waiting for the Fed's Minutes

Data on the good condition of the German labor market slightly supported the European currency, which began to gradually lose its positions paired with the US dollar after the pre-New Year rally that was observed in the entirety of the previous week.

According to the report of the Federal Ministry of Labor of Germany, the number of applications for unemployment benefits in Germany in December 2017 decreased by 29,000, while economists had expected a decrease in the number of applications by only 10,000.

Data for November were revised. The final report indicates a decrease in the number of applications for 20,000, not 18,000, which was previously announced. The unemployment rate in December was 5.5%.

While the market is just beginning to "swing" after the New Year holidays, all investors' attention today will be directed to the publication of the Fed's minutes from the meeting that took place last year on December 12 and 13. It should be noted that it decided to raise federal funds rates by a quarter of a percentage point to the range of 1.25% -1.50%.

In the minutes, it will be more significant to expect further interest rate increases early in 2018. Analysts predict at least three of such increases. The timing of the next rate increase will also be important. If it is the 1st quarter of this year, it is possible that the demand for the US dollar may return, as there are no plans to change the policy of the European Central Bank until spring.

Retail sales, according to The Retail Economist and Goldman Sachs, fell after the Christmas week. According to the report, for the week from December 24 to December 30, the sales index in US retailers fell by 2.3% compared to last week. In comparison with the same period in 2016, the sales index in US retail chains grew by 3.9%.

As for the technical picture, the attempt of the bulls in the morning to reach on an important level of resistance in the area of 1.2070 was unsuccessful. As a result, the scenario began to develop in line with a bearish forecast. Now you can expect the support in the area of 1.2000 and 1.1955. Talk about the resumption of the upward trend in the euro will be possible after consolidation above 1.2055.

The British pound, though not immediately, but began to decline gradually against the US dollar after a weak report in the construction sector of the UK.

According to the statistics agency,, the index of supply managers for the construction sector of the UK in December 2018 fell to the level of 52.2 points from 53.1 points in November. It should be noted that the value above 50 points indicates the retention of activity, despite the decline in the index.