The British pound lost a number of positions that it won from the US dollar yesterday after the news on the UK elections. Let me remind you that the sharp increase in the pound occurred after the leader of the Brexit Party, Nigel Faraj, refused to fight for the seats in the British Parliament claimed by the Conservative Party. Faraj's refusal will allow the Conservative Party to gain a majority with greater confidence. The leader of the Brexit party said that his candidates will only fight for places for which the Labour Party and the party of opponents of Brexit will fight.

GBPUSD

Today's fundamental data has returned the market to the side of the bears, which recaptured more than 50% of yesterday's growth. The stop occurred in the area of the expected support level of 1.2820.

Today's report shows how the unemployment rate in the UK has declined, but the good news was completely offset by a slowdown in British earnings.

According to the data, the unemployment rate in the UK fell to 3.8% from July to September 2019, while the number of unemployed fell by 58,000. At the same time, the report indicates that the number of applications for unemployment benefits increased by 33,000 in October, which is a bad sign for the economy. However, a more serious problem is the slowdown in average weekly earnings, which fell to 3.6% from 3.8%. The decrease in earnings will force the British to save more, which will affect retail sales, which are the main driver of GDP growth. Economists had expected the unemployment rate to be 3.9%, and the number of applications for unemployment benefits to increase by 22,500. They also predicted wage growth of 3.8%.

As for the technical picture of the GBPUSD pair, the break of the 1.2820 support will return the pound to a larger low near 1.2800, where buyers will try to build the upper boundary of the new rising channel. If buyers are able to protect today and a low of 1.2820, then we can count on the continuation of the upward trend of the trading instrument in the area of highs 1.2870 and 1.2895.

EURUSD

Buyers of risky assets, although they were satisfied with the reports on expectations and business sentiment, did not lead to larger growth, which indicates a predominance of bears in the market.

According to the ZEW research institute, the indicator of economic expectations in Germany rose to -2.1 points in November this year from -22.8 points in October. Economists predicted a less active growth of the index to -14.8 points. The current situation index in November amounted to -24.7 points, showing a weaker growth from the value in October in the region of -25.3 points. ZEW noted that the majority of respondents noted an improvement in the global economy in the near future. The good trade negotiations between the US and China also inspire hope for faster economic growth. Also, expectations for an agreement between the UK and the EU have grown.

As for the eurozone, the mood index in the business environment amounted to -1.0 points in November against -23.5 points in October this year. The data exceeded forecasts of economists who expected the index to recover only to -11.5 points.

Today's statements by Federal Reserve Vice Chairman Richard Clarida have not led to changes in the markets. Clarida noted that success in reducing inflation has created new problems for central banks, as low interest rates can complicate the task of stimulating growth in future economic downturns, and many trends that push interest rates down are associated with factors beyond the control of central banks. banks.

As for the technical picture of the EURUSD pair, bearish sentiment continues to prevail. The return of risky assets to the lows of this week and their updating indicate a clear desire for the bulls to be more active. The main objective will be a breakout of support 1.1015, which will push the trading instrument to the lows in the areas of 1.0970 and 1.0940. If today's speech by US President Donald Trump puts pressure on the US dollar, and this happens only if the US leader is again not satisfied with the interest rate, the demand for risky assets may return in the short term. In this case, it is best to consider short positions from the upper boundary of the side channel in the region of 1.1050 or sell from larger levels in the regions of 1.1080 and 1.1130.