On July 23, after the market further ruled out the Fed's one-off interest rate cut of 50 basis points, the US dollar index continued to strengthen. In the day, Boris Johnson was elected as the leader of the Conservative Party and will become the new prime minister of the United Kingdom. The British pound was short-term, but it was difficult to stop the decline of the pound. The euro rallied with a wave of sharp declines to meet the ECB's interest rate decision on Thursday.
GBPUSD
The pound fell 34 points on Tuesday, once again close to its previous 2019 low of 1.2380, closing at 1.2436.
The weakness of sterling comes from a stronger dollar and a rise in the possibility of unagreed Brexit from Britain's new prime minister. British Prime Minister Election results: Boris Johnson (Boris Johnson) has no suspense to beat Jeremy Hunter (Jeremy Hunt) by 92152 votes (66 per cent) by 46656 votes (34 per cent). She will take over as British prime minister tomorrow to replace Teresa May. By then, Boris Johnson will be the first member of a single party in British history, not an parliament councillor or electorate. Speaking after the election results, Johnson said he would finish Brexit on October 31. Cabinet members will be announced in the next few days. Johnson is regarded as the leader of the hard Brexit faction. Johnson had previously promised that Britain would leave the European Union by October 31, whether or not an agreement was reached. With regard to Johnson's hardline attitude, the European Union insists it will not restart negotiations with Britain on the Brexit deal. Britain is more likely to hold a general election before Brexit. Increase the probability of unagreed Brexit from 15 percent to 20 percent and the possibility of not Brexit from 40 percent to 35 percent.
Technically, the daily chart shows that the pound has fallen since hitting a 2019 high on March 13 and has remained so far. The pound's 3-day average is now running below the 20-day average, and the RSI index continues to decline at 38. The pound is expected to continue to decline in the short term and to 1.2380 at the previous low.
EURUSD
The euro continued its decline on Tuesday, with the daily line falling 52 points, falling below the 1.1200 mark before closing at 1.1150.
The International Monetary Fund on Tuesday downgraded its forecast for global economic growth, which is expected to grow 3.2 per cent in 2019 and 3.1 per cent in April. Meanwhile, the International Monetary Fund raised US GDP growth expectations for 2019 to 2.6 per cent, for the euro zone in 2020 to 1.6 per cent and for 2019 to 1.3 per cent Expectations for a 10-basis-point cut in deposit rates have fallen to less than 40 per cent from about 60 per cent on Friday, but analysts expect the ECB to Moderately forward-looking guidelines and possibly more generous terms for its planned multi-year new loans. Since the ECB president Since Draghi spoke in Sintra in June, hopes of easing the policy have increased. Since then, Italian bond yields have been lower More than 100 basis points down, the euro fell more than 2% during the period. The European Central Bank is now expected to open its easing stock this week The process of monetary policy, after adjusting for forward-looking guidance, the ECB will cut interest rates in September and conduct a new round of bond purchases. Yuan will continue to weaken in a more relaxed environment.
Technically, the daily chart shows that the euro has emerged from the top of its head and shoulder since June, and that the right shoulder is significantly lower than the left shoulder, suggesting that the euro will have a greater ability to act in the future. And the 3-day average has been running below the 20-day average since July 2, which is also a bearish signal. The euro is expected to continue to decline and take the lead in testing its previous 2019 low of 1.1106, which would open up huge bearish space if it falls below that position.
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