In this review we will fully focus on the situation in Europe. As we can see, the rates continue within the downtrend, which started a year ago under completely different conditions. Today, the trend continues under the influence of other factors, which, despite the attempts of investors to remain optimistic, leave safe assets strong.
For two months we observed a price correction, but it could not continue indefinitely. Finally, the momentum was lost and the trend reversal did not take place. This week, many reports on the UK economy were published, which in general can be assessed positively. For example, an outstanding indicator was the decrease in unemployment in April to 3.9%, while business activity in the industrial sector rose to 40.6 pips, which is the highest indicator in the region. The only disappointing factors are the growing budget deficit, declining retail sales, and slowing inflation. This certainly puts pressure on the pound, holding back its recovery.
The Swiss franc, in the absence of any data on the Swiss economy, can count on support when there is a demand for safe assets. The opportunity to strengthen was received today. Investors are cautious when investing in risk assets due to the conflict between the US and China related to Hong Kong. This conflict is far from over, and may develop against the backdrop of a weak global economy. Each new day, we can see an increase in the threats from the US to China. Also, it is still unknown whether China will take retaliatory measures against US sanctions against Huawei, which is the largest and strategically most important company for China.
In the current situation, we believe that the downtrend will continue, although next week, volatility should decrease. So the deals to SELL seem the most reasonable. Most technical analysis tools also tend to follow the trend for future deals.
