Euro and pound under pressure against the US dollar at the end of last week after the release of good data on US sentiment, which slightly improved in early November.
However, it was already possible to observe a slight upward correction in the trading instruments today at the European session. The euro demonstrated a technical breakdown of the important resistance of 1.1026, which led to a slight demolition of the seller's stop orders and the strengthening of risky assets. The pound rose after data on the UK economy and a report on industrial production.
As I noted above, a University of Michigan study indicated that the preliminary consumer sentiment index was 95.7 points in November versus 95.5 points at the end of October this year. Economists had expected the index to reach 95.3 points in November. But the current conditions index weakened in November and dropped to 110.9 points against 113.2 points in October. However, the decrease in this indicator was offset by expectations regarding the future situation, where the index rose to 85.9 points in November against 84.2 points in October. It is noteworthy that the actions of the administration of the American President to unleash trade wars do not greatly concern ordinary Americans. The study indicated that only 1 out of 4 respondents spoke negatively about the introduction of fees.
introduction of duties.
On Friday, Lael Brainard, one of the members of the Board of Governors of the Federal Reserve, also delivered a speech. She said that after all the work done with interest rates, the central bank needs to focus more on the impact of climate change on monetary policy. We are talking about climate change, which may affect long-term prospects for labor productivity, which will negatively affect the level of real interest rates. This is a study in which it is indicated that abnormal periods of warming leads to an increase in insurance premiums and increased costs, which will necessarily have consequences for economic activity.
As for the current technical picture of the EURUSD pair, so far, there is no serious demand for risky assets after buyers return the level of 1.1025. Most likely, the bulls will take a number of active actions and try to tighten the trading instrument to the resistance of 1.1050, however, to continue the upward correction, stronger fundamental data will be required. Also, in the hope of maintaining a downward trend, bears will be more active in protecting this range. The return of the pair to the level of 1.1010 will lead to a new wave of sales of risky assets with updating lows in the areas of 1.0990 and 1.0940.
USDCAD
The Canadian dollar weakened against the US dollar after the release of fundamental statistics on Friday and continues to remain under pressure. To continue the upward correction of the USDCAD pair, a breakdown of last week's high in the area of 1.3235 is necessary, which will open a direct path for the bulls to new resistance levels 1.3270 and 1.3330.
If traders calmly accepted the decline in building permits in Canada, then the information that job creation in Canada unexpectedly stalled in October this year increased pressure on the Canadian dollar.
According to the National Bureau of Statistics Canada, building permits in September 2019 immediately fell by 6.5% compared with August and amounted to 8.34 billion Canadian dollars. Economists had expected permits to decline by 1%. Compared to the same period of the previous year, permits increased by 2.1%.
Bookmarks of new homes in October also fell, and immediately by 8.7%. So, compared with the previous month, the number of bookmarks was 201,973 against 221,135. Economists expected bookmarks to be 225,000.
According to the Canadian Bureau of Statistics, the number of jobs in Canada fell by 1800 in October 2019, while economists expected, on the contrary, an increase of 17,000. The unemployment rate in October was 5.5%. The main reduction was due to the manufacturing sector. But the average hourly earnings in October showed annual growth of 4.0%, which is a good indicator.
