07.11.201910:15 Forex Analysis & Reviews: Trading plan for EUR / USD and GBP / USD on 11/07/2019

Yesterday, the primacy of American statistics over European statistics was clearly demonstrated, since in the absence of macroeconomic data from the United States, the market almost stood still. Although in Europe, a lot of interesting data was published.

It all started with the publication of data on production orders in Germany. The decline of which slowed down from -6.5% to -5.4%. Although the picture is still extremely sad, it now shows at least a hint of light at the end of the tunnel. Maybe not a hint, but at least hope. In addition, the final data on business activity indices of the same Germany came out slightly better than forecasts. Thus, the index of business activity in the service sector increased from 51.4 to 51.6, while they predicted a decrease to 51.2. The composite business activity index rebounded from a historic low of 48.5 points and grew to 48.9 points. Forecasts indicated an increase to 48.6. In France, all forecasts were confirmed, and the index of business activity in the services sector grew from 51.1 to 52.9, which allowed the composite index to grow from 50.8 to 52.6. Besides, Italy's business activity index rose from 51.4 to 52.2, with a projected decline to 51.0. Unfortunately, only Spain showed poor results yesterday, which reported a decrease in the index of business activity in the services sector from 53.3 to 52.7. Moreover, the fourth euro area economy showed a slowdown in industrial production growth from 1.4% to 0.8%, although they promised an acceleration to 1.6% at first. However, the main news was data on retail sales. The growth rate of which accelerated from 2.7% to 3.1%, which slightly increases the possibility of inflation, and therefore, may delay the decision to reduce the refinancing rate of the European Central Bank.

Retail Sales (Europe):

Naturally, the main event of today is the next meeting of the Board of the Bank of England. However, it can become the most boring. The fact is that no one has any doubts that all the parameters of the current monetary policy will remain unchanged. Mark Carney is already tired of repeating to everyone that the refinancing rate will remain at the current level until the epic with Brexit is over. In addition, the resolution of this story is postponed again for the next three months. And Brexit itself was forgotten a bit, as the entire political class of the United Kingdom enthusiastically switched to its favorite past time - to pour mud on its opponents. After all, early parliamentary elections are at hand. Thus now, it's not time for boring negotiations on a divorce agreement since there are more important things to do. So investors will not be surprised at all by the decision of the Bank of England to leave everything as it is. Nevertheless, against the background of the actions of the Federal Reserve System and the European Central Bank to mitigate its monetary policies, Mark Carney's actions look even good. Despite that, the results are absolutely predictable, and investors are much more concerned about how the election will end and what will happen to Brexit.

Bank of England Refinancing Rate (UK):

In the meantime, Germany has already reported on the further deepening of the recession in industry, although it has, incidentally, revised the previous results for the better. Thus, the decline in industrial production of the largest economy in the euro area accelerated from -3.9% to -4.3%. It was previously assumed that in the previous month, industry was down 4.0%. To simply put it, the situation is only getting worse, despite the titanic efforts of the European Central Bank to stimulate economic growth. Today, Italy will also report on retail sales, the growth rate of which may accelerate from 0.7% to 1.4%. However, this will not change anything, since it is much more important than what is happening in the largest economy of the euro area.

Industrial production (Germany):

Meanwhile, the United States expects a reduction of 10 thousand in the total number of applications for unemployment benefits. In particular, the number of initial applications for unemployment benefits may be reduced by 3 thousand, and the number of repeated applications by another 7 thousand.

The euro/dollar currency pair, showing a rapid downward interest, managed to overcome the control level of 1.1080, but failed to maintain a downward mood. It is likely to assume that the fluctuation within the level of 1.1080 will remain in the market, forming the time limits of 1.1055 / 1.1090, where work will be carried out on the basis of monitoring the specified boundaries.

The pound/dollar currency pair is forming a gradual downward movement after it felt resistance in the region of the psychological level of 1.3000. It is likely to assume that sellers will still be able to pull the quote to the next level of 1.2770, where a full rebound is possible.