EUR analysis 05.06.2019

The single currency of the European Union region fluctuated in a narrow upward range during the Asian session to see its fifth session retreat from its lowest since May 23, when its lowest since May 19, 2017 against the US dollar on the eve of economic developments and data Expected on Wednesday by the euro zone economies and the US economy, the world's largest economy.

At 04:51 GMT, the EURUSD rose 0.09% to 1.1262, compared to the opening at 1.1252, after reaching a high of 1.1266 and a low of 1.1251.

The markets are looking for Spain, the fourth largest economy in the euro area, to reveal the PMI service index, which may show a contraction of 52.5 versus 53.1 last April, before seeing the same indicator for Italy, the third largest economy in the region. Shrinking to a value of 49.9 versus an increase of 50.4 in April.

France's second-largest economy may also be seeing the final reading of the PMI index, which may show the stability of the widening at 51.7 unchanged from the previous reading of the previous month and from 50.5 in April, before the final reading of the same index of Germany's largest economies Region, which may also show stability at 55.0, unchanged from the previous reading and 55.7 in April.

To show the final reading of the Euro-zone PMI which may show a widening of 52.5, unchanged from the previous reading, versus 52.8 in April, before we also see the economy of the region as a whole, 0.5% versus stability at zero levels in March, while the annual reading of the same index may show a slowdown in growth to 1.5% versus 1.9%.

This comes in conjunction with the release of inflation data for the economies of the euro-zone as a whole with the release of the producer price index, which is a preliminary index of inflationary pressures, which may reflect 0.4% growth versus 0.1% contraction in March, while the same annual reading may show growth accelerating to 3.1% In contrast, we followed yesterday the German Chancellor Angela Merkel expressed the importance of Brussels and Washington reaching a trade agreement.

Otherwise, markets are looking to the ECB meeting on Thursday, where interest rates may be kept at zero levels ahead of ECB President Mario Draghi's expected talk.

On the other hand, investors are currently waiting for the US economy to release preliminary data for the labor market with the release of the index of change in private sector jobs, which may reflect the slow pace of job creation to 185 thousand jobs added to 275 thousand jobs added in April, before Hours of disclosure of the monthly report of non-agricultural jobs and unemployment rates in addition to the average income per hour for the last month.

This comes before the Federal Open Market Committee (FOMC) and Federal Reserve Governor Richard Clarda gave the opening remarks at the event hosted by the Chicago Federal Reserve Bank, coinciding with the final reading of Markit Institute's Index of Service Providers by the United States, which may reflect the stability of the widening At 50.9 versus 53.0 in April.

This is a significant indicator of the fact that the service sector in America represents more than two-thirds of the gross domestic product (GDP) there. This comes in conjunction with the index of the Institute of Supply Services, which may show a breadth of 55.6 versus 55.6 in April. With federal commissioner and federal governor Michael Bowman giving evidence at the nomination session before the Senate Banking Committee in Washington.

Markets are also looking forward later today to unveil the Beige Book report, which is important in its release two weeks before the FOMC meeting, hours after US Federal Reserve Governor Jerome Powell said the Fed would act appropriately to keep pace with growth. The highest 2% and low unemployment rates in the US, explaining that he closely monitors the implications of trade tensions.

Federal Reserve Governor Paul said yesterday at the event hosted by the Federal Reserve Bank of Chicago that the Federal Reserve does not know how and when trade tensions will be resolved, as he points out that the FOMC takes seriously as long-term inflationary pressures may affect expectations Inflation later, boosting speculation about a possible cut in federal funds rates in the coming period.

Technical Analysis

EUR/USD pair continues to fluctuate around the 1.1260 level and keeps the daily closing below this level, keeping our bearish outlook intact for the day, waiting for a breach of 1.1180 to consolidate the chances of a rally towards 1.1100 which is our first major target.

A break above 1.1260 and stability above it will stop the bearish outlook and push the pair to gain additional gains of 1.1350 then 1.1443.

The trading range for today is expected among the key support at 1.1150 and resistance at 1.1320.

The general trend for today is bearish.