17.06.201910:14 Forex Analysis & Reviews: EURUSD: Pressure on risky assets will remain, but buyers will try to minimize the fall

The euro and the British pound continued to decline against the US dollar on Friday after the release of a number of fundamental statistics indicating a good economic situation in the US.

The growth in consumer spending, which accelerated in May this year, is sure to support the US economy in the 2nd quarter of this year.

According to a report by the US Department of Commerce, retail sales in May 2019 increased by 0.5% compared to the previous month. Economists had expected sales to rise by 0.6% in May. Let me remind you that consumer spending is the main driver of growth in the US economy, accounting for more than two-thirds of GDP.

Industrial production in the US in May, despite a number of trade sanctions, also increased, which is a good signal indicating the strength of the sector.

According to the Federal Reserve, industrial production in the US rose to 0.4% in May this year compared to the previous month, while economists had expected that production in May would show an increase of only 0.1% compared to the previous month.

Data for April were revised upwards to -0.4%, while earlier it was reported a drop of 0.5%. Compared to the same period of the previous year, industrial production increased by 2%.

The growth of inventories of companies in the US in April this year will also support the economy. According to the US Department of Commerce, inventories rose to $ 2.03 trillion. Economists had expected a 0.4% increase in inventories. Inventories in the manufacturing sector in April increased by 0.3%, and stocks in retail trade by 0.5%.

The negative contribution to the overall series of reports was made by the sentiment of households in the United States, which worsened in early June due to trade conflicts and the decline in the rate of hiring new workers.

According to the University of Michigan, the preliminary index of consumer sentiment in early June 2019 fell below 100 points and amounted to 97.9 points. Economists had expected the rate to drop to 97.3 points in June.

As noted above, most of the deterioration occurred against the backdrop of a decline in optimism about the trade war after the introduction of new import duties from Mexico and China, as this will certainly affect the growth prospects of the national economy.

As for the technical picture of the EURUSD pair, the pressure on the euro will continue but will be limited by a number of indicators at the beginning of the week. The MACD indicator indicates the formation of divergence, but a support breakthrough in the area of 1.1190, where this divergence can be formed, will lead to a larger drop in risky assets in the area of local lows of 1.1160 and 1.115. If the euro makes an attempt to grow from 1.1190, the upward correction will be limited by the resistance of 1.1240 and 1.1270.