EUR and GBP: The decision of the European Commission may weaken the euro. Pound is waiting for news on Brexit

The European currency continues to update weekly highs contrary to all forecasts gradually getting closer to large resistance levels located near the highs of this month.

However, it's not at all desirable to talk about preserving the euro's current upward potential before the decision of the European Commission on Italy. It is quite probable that the European Commission will express its position tomorrow on the issue of Italy's failure to comply with the EU's budget requirements and it will more likely not be in favor of Italy. This will lead to a surge in volatility and may derail the trading tool to more attractive levels of support for buying, which we will talk about below.

The data released yesterday showed that the positive balance of the current account of the balance of payments in the eurozone in September declined compared with August. The decline was due to the rapid decline in the positive balance of trade in goods.

According to the report of the European Central Bank, the positive balance of the current account of the balance of payments in September 2018 was 17 billion euros, while in August the figure was 24 billion euros. However, over the past 12 months, the overall Eurozone surplus has grown.

Let me remind you that US President Donald Trump has repeatedly criticized the eurozone economy for the inflated foreign trade surplus, which provoked the US to a trade conflict, which is still "in limbo". For 12 months, the positive balance of the current account of the Eurozone balance of payments amounted to 357 billion euros.

Data on the US economy put pressure on the US dollar. According to the report, the indicator of confidence in housing builders in the United States in November of this year decreased. This was due to concerns about the availability of real estate. According to a report by the National Association of Home Builders, the housing market index fell to 60 points in November. Economists expected the index to be 67 points. Let me remind you that the index value of more than 50 points indicates a good market condition.

The speech of Fed representative Williams did not support the US dollar yesterday. According to the statement, the US economy is in very good condition but employers report a shortage of skilled labor, which indicates a good state of the labor market.

Williams also noted that the Fed's current monetary policy rate is not predetermined but the Fed is moving toward a gradual increase in interest rates. The representative of the Fed once again reminded that the purpose of the committee is to support economic growth in the future.

As for the technical picture of the EUR/USD pair, problems for buyers of the European currency may arise already in the resistance area of 1.1480 since a number of indicators indicate the divergence and overbought of the euro in the short term. An unsuccessful consolidation above 1.1480 may lead to the formation of a larger downward wave with an exit to the minima of 1.1420 and 1.1390. In case of a breakthrough at 1.1480, the upward trend may continue until the monthly highs of 1.1520 and 1.1570 are updated.

As for the British pound, the uncertainty with the implementation of the plan for Brexit continues to put pressure on the GBP/USD pair. Yesterday's speech by the British Prime Minister Theresa May to the members of the Confederation of British Industry did not bring much success. After May's statement, CBI's CEO Carolyn Fairbairn said that the draft agreement with the EU presented by the Prime Minister was not perfect but was a kind of compromise in the current environment.