Euro falls after mixed economic data from Europe
The British pound declined while the FTSE rose by 50 basis points as traders continued to worry about Brexit. This is after divisions in parliament erased the potential for a vote before the deadline. All the proposals submitted to parliament failed to garner a majority. Theresa May has vowed to table her negotiated plan but there is a likelihood that she will not get the required votes. As this happened, the auto sector continued to flash warnings to the members. Data from the Society of Motor Manufacturers and Traders showed that in February, more than 123K vehicles were manufactured. This was a decline of 15%. In a statement, the head of the society said that:
The ninth month of decline for UK car production should be a wakeup call for anyone who thinks this industry, already challenged by international trade hostilities, declining markets and technological disruption, could survive a ‘no deal’ Brexit without serious damage. A managed no deal is a fantasy.
The euro continued to tank after the release of mixed economic data from the European Union. In the EU, the services sentiment for March declined to 11.3, which was lower than the expected 12 and the previously-released 12.1. The industrial sentiment declined to minus 1.7, which was lower than the expected minus 0.8. The business and consumer survey for the month declined to 105.5, which was lower than the expected 105.9 while the business climate declined to 0.53. In Germany, CPI rose by 1.3%, which was lower than the expected 1.6%. On a positive note, the private sector loans in February increased by 3.3% while the M3 money supply rose by 4.3%.
In the United States, numbers from the Commerce Department showed that the economy expanded by 2.2% in the fourth quarter. This was a much lower number than the 2.4% traders were expecting and the previously-released growth of 2.6%. The GDP price index rose by 1.9% while the GDP sales rose by 2.1%, which was lower than the expected 2.6%. In the past week, initial jobless claims declined by 211K, while continuing jobless claims rose by 1,756K. Meanwhile, the price of crude oil declined sharply after Donald Trump requested OPEC to increase supply.
The EUR/USD pair declined today after mixed economic data from the EU. The pair reached an intraday low of 1.1225, which is the lowest level since March 11. This price is between the 0% and 23.6% Fibonacci Retracement levels on the four-hour chart. The price is also along the lower line of the Bollinger Bands. Similarly, the On Balance Volume indicator has declined to the lowest level in months. The pair will likely continue the downward momentum as it attempts to reach the important support of 1.1175.
The GBP/USD pair moved slightly lower today as confusion about Brexit continued. The pair reached an intraday low of 1.3100. On the daily chart, this price is along the 38.2% Fibonacci Retracement level and slightly above the 50-day and 100-day moving averages. The pair is forming a symmetrical triangle pattern, which means that it could see a major break-out in the next few days. Such a breakout would make it test the 50% and 23.6% Fibonacci Retracement levels of 1.3400 and 1.2885 respectively.
The EUR/CHF pair declined today to an intraday low of 1.1170. This was the lowest level since January and in the daily chart it is along an important support. As such, the price is below the 100-day and 50-day moving averages while the RSI has dropped below the oversold level of 60. With the pair along an important support, there is a possibility that it will move slightly upwards, before it continues the downward momentum.