Today we expect the gross volume of mortgage loans and the index of changes in retail sales from the UK. After the release of previous reports from the UK, our pair has updated the 2-year highs and is currently near the 1.4250 mark, having moved from the maximum mark of 1.4325.
Yesterday, the US economy minister approved a weakening of the dollar in favor of the US economy. Trade Minister Wilbur Ross said that "the short-term strength of the dollar does not interest us," and the weakening of the dollar is acceptable and good for trade and new opportunities. He also noted: "In the long run, the strength of the dollar is a reflection of the strength of the US economy."
Therefore, before the speech of the head of the White House Donald Trump tomorrow at the World Economic Forum in Davos, the dollar weakened against the major currencies. Investors are also being pressured by concerns about Trump's protectionist statements on the forum and the dollar index is showing a decline, currently at around 88.90, which is a 4-year low.
Given these factors, we can expect further weakening of the reserve currency relative to other pairs.
On the chart we can observe a strong upward momentum and, given the MACD indications, we can state that the momentum has not weakened yet.
Therefore, we should enter long positions with the targets of 1.4300, 1.4350, and 1.4395. Support levels will be 1.4210 and 1.4180.
