08.06.201810:32 Forex Analysis & Reviews: All attention to the G7 summit

The European currency failed to catch hold of important resistance levels on Thursday afternoon amid good data on the US economy and the publication of the survey of WSJ economists. The EURUSD fell, which led to the formation of resistance at 1.1820.

The attention of traders and investors is now concentrated more on the G7 summit, which starts today and will be held on the weekend. It is most likely that the main topic of the summit, of course, will be the US trade relations with a number of other countries, primarily Canada and the European Union.

The trade conflict that erupted after the US imposed import duties on steel and aluminum against Canada and the European Union could trigger counter tariffs on US goods, which would lead to even greater contradictions and exacerbation of trade relations.

As noted above, a survey of WSJ economists, which was published yesterday, had some support for the US dollar. In it, WSJ experts expect a moderate growth in the US economy due to a softening of the rules for banks. It is expected that the Fed will increase interest rates several times in June and September of this year, which will strengthen the US dollar.

Also, economists expect that the US GDP will be 2.9% in 2018, + 2.4% in 2019 and + 1.9% in 2020. The unemployment rate should approach the 3.5% mark by mid-2019.

The report on the growth of consumer lending in the US for the month of April this year was also positively received by the market. According to the Federal Reserve System, consumer lending in April 2018 increased by $9.26 billion compared with the previous month. Total lending increased by 2.87% compared to the same period of the previous year. Economists predicted an increase in lending in April by $15 billion. Credit card loans grew by 2.64%.

The British pound managed to consolidate its position in the afternoon, after a representative of the Bank of England Ramsden said that economic data indicate a resumption of growth in the UK economy in the second quarter of this year, and the slowdown, which was noticeable in the first quarter, was only temporary.

Ramsden also drew attention to the fact that without an increase in rates, inflation is likely to remain above the target level, in connection with which he sees the need for further tightening of the monetary policy of the UK, since a stable stay of inflation above the target level can create certain problems for the regulator.