The British pound remained under pressure yesterday afternoon after it became known that in the struggle for leadership in the British Conservative Party, Boris Johnson won the first round of voting, receiving 117 votes. In the next round of voting, 7 candidates will compete for leadership in the Conservative Party.
Yesterday, Johnson said that he did not want Brexit without an agreement, but did not rule out such a scenario. After that, the pressure on the pound returned, since Boris Johnson is one of the main candidates for the post of Prime Minister of Great Britain, and the pound is vulnerable to any sign of hard Brexit.
As for the technical picture of the GBPUSD pair, the preservation of the bear scenario is most likely. A break of the support of 1.2660 will return the pressure on the trading instrument and lead to lows in the area of 1.2615 and 1.25860.
Yesterday's data on the US did not have much impact on the EURUSD pair.
According to a report by the US Department of Labor, prices for imported goods in the United States fell in May of this year, which is another sign of weak inflation, which will soon become a serious problem for the Federal Reserve System.
Thus, import prices in May 2019 fell by 0.3% compared with the previous month, which fully coincided with economists' forecasts. Compared with the same period of the previous year, import prices fell by 1.5%.
Let me remind you that more than 3/4 of the economists of the Wall Street Journal expect that at the beginning of autumn of this year, namely in September, the next step of the Federal Reserve System will be to lower interest rates. It is also rumored that the Fed may lower interest rates already during the next meeting, which will be held in July of this year.
Weekly data on the US labor market did not strongly support the dollar, although they kept it in the leading positions.
According to a report by the US Department of Labor, initial claims for unemployment benefits for the week from June 2 to 8 increased by 3,000 to 222,000. Economists expected the number of applications to be 215,000.
As for the technical picture of the EURUSD pair, despite the decline in the euro, the downward potential is limited. It is likely that a good retail sales report will help the US dollar to reach a larger support level of 1.1250, but the demand for risky assets will gradually return as expectations of lower US interest rates rise. The upside potential of the euro at the end of this week is limited by the resistance of 1.1310.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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