EUR analysis 07.06.2019

The single currency of the European Union region fluctuated in a narrowly bearish range during the Asian session to see a rebound

To the second session of the highest since April 17 against the US dollar on the eve of developments and economic data expected on Friday by the economies of the euro zone and the US economy, the largest economy in the world.

At 04:51 GMT, the EURUSD dropped 0.06% to 1.1269, compared to the opening at 1.1276, after reaching a low of 1.1266, while reaching a high of 1.1281.

The markets are currently looking ahead to Germany's biggest economy, the seasonally adjusted Industrial Production Index, which could reflect a 0.4% drop from 0.5% in March, while the seasonally adjusted annualized reading for the same index may show a contraction of 0.4% 0.9% in the previous annual reading for the month of March.

This coincides with the current account reading and Germany's trade balance reading, which may show a contraction of the surplus to 18.7 billion euros from 20.0 billion euros in March, amid expectations that the revised German exports will reverse 0.9% from 1.5% The revised German imports also showed a 0.2% drop from 0.4% in March.

Ahead of France's second-largest economy, the Industrial Production Index, which could rise 0.3% from 0.9% in March, as France's trade balance was released, which could show a contraction of the deficit to 4.9 billion euros from 5.3 Billion euros in March, leading to the release of retail sales for Italy, the third-largest economy in the region, which could show a 0.2% rise from 0.2% in March.

This comes hours after the end of the ECB meeting, in which it was decided to keep interest rates at zero levels and stabilize the marginal lending rate at 0.25%, while maintaining a negative interest rate of -0.40% before we witness the press conference of the Bank's Governor European Central Bank President Mario Draghi, who noted that the European Central Bank is ready to cut interest rates to boost economic growth in the region.

Draghi also said that the ECB is ready to adopt a new monetary stimulus in the purchase of bonds to support economic growth in the euro area, adding that these actions come at a time of increasing uncertainty about trade disputes and their effects on the global economy, adding that the European Central Is ready to use all means and instruments available to it to drive economic growth and revive exports and European industry.

On the other hand, investors are looking for the US economy to reveal labor market data, which may show the stability of the unemployment rate at its lowest level in 49 years at 3.6%, unchanged from the previous reading for the month of April, amid expectations that reflect The median hourly income index accelerated the pace of growth to 0.3% versus 0.2% in April.

This is in line with the release of the Non-Farm Employment Change Index, which may indicate a slower pace of job creation to 180,000 added jobs versus 263,000 jobs in April and before we see the final reading of the Wholesale Inventories Index, 0.7%, unchanged from April's preliminary reading and 0.1% lower than in March

Technical Analysis

EURUSD is floating in a short term trend line, and has dropped in recent trading on the intraday basis, after the important resistance level of 1.1300 has stabilized to try to gain a positive momentum that could help it recover and rise again and look for a bullish bottom based on it to start this rise . The RSI of overbought areas is overbought compared to the price movement, suggesting a positive divergence with the Stochastic indicator, with positive support for SMA 50 for intraday basis.

Therefore, we expect the pair to rise again in the next trading session, to attack the resistance level of 1.1300 again, and if breached this level will open the way for further gains, to target immediately after the resistance level 1.1335, and to confirm this scenario the level of support 1.1250.

The general trend for today is bullish.