The currency market began the new trading week with a sideways movement. Both the British pound and the euro are showing just tepid dynamic. Let us take a look at the fundamental factors and prospects for further changes in the euro and the pound sterling. Notably, the existing currencies’ dynamic is leading to the US dollar appreciation. This looks like an inertial movement amid the publications from the US. According to the forecast, existing home sales may slide by 1.0%. Nevertheless, the indicator will remain at a quite high level. This points to an increased consumer activity that is the main driver of the US economy. However, the report will be published later today. That is why the effect will become visible only tomorrow during the Asian trade. On Friday, the euro declined and renewed the local low recorded on November 17. As a result, the currency was trading at 1.1250. In fact, traders received a signal about the formation of a new downtrend cycle. The euro began falling in early June and since then, has lost almost 1,000 pips. The reading of 1.1250 is acting as an intermediate support level, where the price stagnated. Once the price fixes below 1.1240 on the four-hour chart, the volume of short positions is likely to rise. This will prove the bearish market sentiment. According to the alternative scenario, the euro may rebound. If the price consolidates above 1.1300, traders will receive buy opportunities. At the same time, the pound/dollar pair broke the lower limit of the sideways channel between the levels of 1.3465 and 1.3510. As a result, the quote dropped to the support level of 1.3400, where it rebounded. If the pair resumes falling, traders will receive a new sell signal after the price fixation below the support level of 1.3400. In this case, the price may hit a fresh low of 2021. The alternative scenario will become possible if the euro/dollar pair consolidates above 1.3400. This may lead to a formation of a new sideways channel.

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