08.02.201810:36 Forex Analysis & Reviews: Shaky position of the European currency

The US dollar continued its strengthening against the European currency and the British pound on the afternoon of Wednesday, February 7, after it became known that an agreement on financing the state budget was reached in the US Senate.

Good fundamental data on the US economy also provided support to the dollar.

According to the report, consumer lending without taking into account mortgage loans in December last year increased by 5.8%, or by 18.45 billion US dollars compared to the same period of the previous year. Economists had expected growth in consumer lending by $ 19.3 billion. Renewable loans showed an annual growth of 6.0%, and non-renewable loans increased by 5.7%.

As noted in the report, the main growth in loans is associated with a fairly high growth rate in the US, as well as a high level of consumer confidence.

Investors gained some confidence in the actions and agreements of US politicians after the US Senate announced the achievement of an agreement on financing the state budget for a period of two years. Also, fears related to the cessation of the work of the government or the default on state debt obligations have disappeared.

As for the technical picture of the EUR / USD pair, it has crept up to a rather serious level of support around 1.2250 and much now will depend on the events in this particular range.

If in the near future, buyers will be able to make a turn from the level of 1.2250 and gain a large enough volume. The growth of risky assets will resume, which will lead to the renewal of resistance levels of 1.2300 and 1.2390. If the bulls retreat with the second fall in this range, we can safely talk about a break in the January upward trend for the euro and further downward correction to the areas of 1.2170 and 1.2120.

The New Zealand dollar continued its downward movement against the US dollar after the decision of the Reserve Bank of New Zealand on interest rates.

According to the data, the Reserve Bank of New Zealand left the official interest rate unchanged at 1.75%, saying that the monetary policy will remain soft for a long time.

At the same time, the RBNZ indicated that inflation forecasts will increase, as there are signs of increased inflationary pressures in the global economy. Long-term expectations for annual inflation were fixed at the level of 2%. It is expected that New Zealand's GDP growth will continue to accelerate due to low interest rates.