EURUSD Analysis 05.02.2019

The single currency of the European Union (EU) region fluctuated in a narrowly bearish range during the Asian session to see its rebound for a third session in four sessions from its highest since January 11 on the eve of developments and economic data expected on Tuesday by Eurozone economies and the US economy. World economy.

At 4:35 am GMT, the EURUSD dropped 0.04% to 1.1433 compared to the opening at 1.1438 after the pair hit a session low of 1.1431 and a high of 1.1441.

Investors are currently waiting for the PMI to release the PMI reading, which may show a contraction of 53.1 versus 54.0 last December, and the same indicator for Italy, the third largest economy in the region, may see a contraction to 50.0 versus 50.5 in December.

Before the release of the final reading of the PMI for France and Germany, which may show deflation stabilizing at 47.5, little change from the previous reading of last month in France, against a contraction of 49.0 in December and a widening stability of 53.1 in Germany versus 51.8, The final reading of the index for the euro area as a whole reflects the stability of the widening at 50.8 and 51.2.

To the release of the Retail Sales reading for the Eurozone as a whole, which may show a decline of 1.5% from 0.6% last November, while the same annualized reading may show a slowdown in growth to 0.5% versus 1.1%. This week, German Chancellor Angela Merkel expressed her unwillingness to open the door to negotiations on the British exit agreement from the European Union and the failure to reach Britain's exit without an agreement.

On the other hand, investors are looking for the US economy to reveal the final reading of the index of the Institute of Service Supply by Markit for the United States, which may reflect the stability of the breadth at 54.2 compared to 54.4 in December, before the disclosure of the index of the Institute of Service Suppliers, which may appear The gap narrowed to 57.2 from 57.6 in December, and we would like to point out that service delivery is important because the service sector in America represents more than two-thirds of GDP.

Federal Reserve monetary policy makers kept interest rates between 2.25% and 2.50% last week while continuing to cut bond purchases by $ 50 billion per month. Federal Commissioner Jerome Powell said that the committee would be patient and monitor economic data as the downside risks to the economy worsened due to the weakening of global growth and volatility of the financial week. Whether or not this approach will continue depends on economic data.

Technical Analysis

The EUR / USD pair is under continuous negative pressure to move below 1.1443 now as the stochastic is still exerting pressure on the price while SMA 50 is trying to protect the price from losses. Therefore, the contradiction between the technical factors makes us prefer to stop neutral until we get The signal is clearer for the next direction.

We note that the continuation of the decline and break 1.1370 will put the price under strong negative pressure to push the trading towards 1.1181 directly while breaching 1.1443 and stability above it will reactivate the scenario of the upward trend targeting levels 1.1550 and 1.1705.

The trading range for today is among the key support at 1.1340 and resistance at 1.1540

Support and resistance:

Support: 1.1386-1.1341-1.1300

Resistance: 1.1443-1.1512-1.1583

The expected general trend for today: neutral