Instaforex Analysis

[InstaForex Gertrude]

Dramatic roles of the pound: a candidate for decline and a source of tension for the market

The UK currency is constantly under the scrutiny of market participants. The reason for this, analysts believe that it is the tense situation around Brexit, creating a danger for the pound itself as well as other currencies.

Many world currencies are involved in the orbit of the British pound. The currency of Great Britain in one way or another affects the means of payment of other countries, and currently this effect is negative. The pound's dynamics were significantly affected by weak macroeconomic statistics from the UK on inflation.

According to the report, the base consumer price index fell to 1.5% in August, which is the lowest level since November 2016. According to analysts, the current situation indicates the need to reduce interest rates in the UK. Weak macroeconomic statistics indicate that in the coming months the regulator may reduce interest rates. This is negative news for the British pound, analysts emphasize. It can noticeably lose in price.

Currently, the GBP/USD currency pair is trading in the consolidation range near the levels of 1.2453–1.2445. According to preliminary forecasts, in the event of a decrease in the current level, a further drop is possible to the level of 1.2400. With the implementation of a more optimistic scenario and the breakdown of the upper region of 1.2490, growth is likely to reach 1.2555. After that, the potential to decline to the 1.2400 level is growing, analysts summarize.

An alarming situation in European markets is provoked by uncertainty about Brexit. Currently, the European Parliament has approved, by a majority vote, a deferral for the UK if it so requests. However, this event has already been taken into account by the market, and the pound will not receive strong support from this news. In this situation, investors and traders will invest in more reliable assets, analysts are certain.

Analysis are provided by InstaForex

[IFX Yvonne]

Forecast for EUR/USD on September 25, 2019

EUR/USD

Yesterday was very unfortunate for two heads of state - Boris Johnson and Donald Trump; the Supreme Court of Great Britain declared the sending of Parliament on forced leave as unlawful and today it will return to work, and the House of Representatives of the US Congress began the impeachment procedure of Donald Trump for "betrayal of his oath of office, betrayal of our national security and betrayal of the integrity of our elections." The reason was allegedly his demand for the President of Ukraine Volodymyr Zelensky to launch an anti-corruption investigation against John Biden's son Hunter, the head of the gas company in Ukraine Burisma Group.

At the same time, the Ifo index of business sentiment in Germany rose from 94.3 to 94.6 in September, while the US consumer confidence index from the Conference Board dropped from 134.2 to 125.1 in the same month. The euro has grown by 26 points.

We do not believe that Trump is facing real impeachment, he just once again makes it clear that there is nothing for that "upstart" in the second presidential term. Earlier (at the end of April), we wrote that the Democratic Party successfully promoted its people to leading posts in many countries, now they need to restore "order" in the country.



From a technical point of view, the situation returned to normal over the day. On the daily chart, the signal line of the Marlin Oscillator is moving down from the boundary with the growth territory.

On a four-hour chart, the price turned around, not reaching the resistance of the indicator lines, Marlin returned to the decline zone. The main scenario with a decrease in the euro remains, the target of 1.0926 is a low of September 12 and 3.



*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.