At the European trading session, the EUR / USD pair shows a slight correctional decline, after a strong increase in quotations at the Asian trading session. The main driver of growth was the news of the crushing victory of the Conservative Party in the parliamentary elections in the UK. According to media reports, conservatives will receive more than 350 seats in parliament, showing the best result since 1979, when Margaret Thatcher led the Conservative Party. Then the conservatives got 339 seats in parliament.
Now Boris Johnson is getting a good opportunity to ratify the earlier agreement with the EU and implement the Brexit process as early as next month.
Another support factor for the EUR / USD pair is the US dollar, which continues to lose ground across the entire spectrum of the market. Pressure on the US currency is exerted by reports of an agreement between the United States and China on the abolition of previously imposed duties and the signing of an interim foreign trade agreement. Earlier, many investors viewed the dollar as one of the defensive assets against trade risks. Now the dollar index is trading at lows since July of this year.
Today in the EU, political news will be in the spotlight: the results of the UK elections and the EU special summit. During the American trading session, it is worth paying attention to the publication of the report on retail sales for November and possible statements by representatives of the White House on trade negotiations with China.
On the chart, the currency pair tested the level of 1.1180 but failed to fix above this level. Accordingly, today we can expect the formation of a retreat in the direction of the level of 1.1130.
Resistance levels: 1.1180, 1.1235, 1.1280.
Support Levels: 1.1130, 1.1105, 1.1070
The main scenario is a correction to 1.1130 and the resumption of upward movement.
An alternative scenario is a breakdown of resistance at 1.1180 and an increase to 1.1235.
The fundamental background is moderately positive. Inside the day, we consider longs after the formation of a retreat to the level of 1.1130.
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