17.05.201912:35 Forex Analysis & Reviews: A review of EUR / USD and GBP / USD pairs on 05/17/2019: A little bit of good

In general, everything went exactly as planned. Unlike the previous day, the American statistics did not disappoint investors and allowed the dollar to continue its confident strengthening. Thus, the number of new construction projects increased from 1,268 thousand to 1,235 thousand, and building permits issued from 1,288 thousand to 1,296 thousand. Growth was expected but only by 37 thousand and 2 thousand, respectively, which in fact, it was 67 thousand and 8 thousand. Yet, the pleasant surprises did not end there since the total number of applications for unemployment benefits fell not by 16 thousand but by 44 thousand. In particular, the number of initial applications for unemployment benefits decreased by 16 thousand, which should have reduced by 8 thousand, decreased by 16 thousand. The number of repeated requests dropped by 28 thousand, instead of being reduced by 8 thousand. Hence, neither a single European currency nor a pound simply had nothing to defend and they continued to lose their positions.

The situation over the pound is aggravated by the ongoing disputes around Brexit since after the conservatives demanded that Theresa May promptly submit a draft agreement on secession from the European Union to the House of Commons. Thereafter, the labourists immediately declared that they would not support him if he will not take into account their position on this issue. Given that the negotiations between Theresa May and Jeremy Corbin ended in complete failure, it becomes clear that the draft agreement could arrange either Labor or the Conservatives since the parties could not find a compromise on a number of issues -but not both sides at the same time. So, whatever plan Teresa May suggests, it will still be blocked either by one or another party.

To be honest, the dollar bounce suggests itself not the first day and today, the common European currency is given a chance for revenge. The fact is that the final inflation data, which is published this afternoon, should confirm the fact of accelerating inflation in Europe from 1.4% to 1.7%. Such a rise in inflation will seriously inspire investors and they will resume purchases of the single European currency. Its growth will pull the pound along with it, however, unless someone again blurs something about Brexit. True, optimism will be somewhat limited by data on the construction sector of Europe, whose growth rates may slow down from 5.2% to 1.8% but this data is not as important as inflation data. Well, in the United States, no macroeconomic data are coming out today.

Thus, it is most likely that the single European currency will rise to 1.1200.

If British politicians again do not make loud statements, the pound has every chance to rise to 1.2850.