EUR Analysis 12.09.2019

The single currency of the European Union fluctuated in a narrow and bullish range during the Asian session to witness the bounce of the fourth session in eight sessions from the lowest since May 15, 2017 against the US dollar on the eve of developments and economic data expected on Thursday by the economies of the region The euro and the US economy are the largest in the world.

At 05:53 AM GMT, the EURUSD rose 0.03% to 1.1013 levels from the opening at 1.1010, after hitting a session high of 1.1015 and a low of 1.1008.

Markets for the euro zone's largest economy, Germany, are awaiting the release of the final CPI reading, which may reflect a steady contraction of 0.2%, unchanged from the prior initial reading for August and against 0.5% growth in July, before the final reading is revealed. The index is similar to France, the second largest economy in the region, which could reflect a stable growth of 0.5% versus a contraction of 0.2% in July.

This comes before the third largest economy in the region is witnessing the release of the Unemployment Rate, which may reflect a decline to 10.0% vs. 10.4% in the first quarter, and before the release of the seasonally adjusted reading of the industrial production index for the euro area as a whole, which may reflect a decline in the decline to 0.1% The annual reading of the same index may show that the decline narrowed to 1.3% from 2.6%.

Up to the ECB meeting and the press conference of ECB Governor Mario Draghi from which ECB monetary policymakers are expected to introduce short-term benchmark interest rates to a negative level and announce new expansionary measures and likely resumed quantitative easing policies to support The pace of growth of the eurozone economies.

On the other hand, investors are waiting for the US economy to release inflation data with the release of the CPI reading which may reflect a slowdown in growth to 0.1% vs. 0.3% in July, and the core reading of the same index may show a slowdown in growth to 0.2% vs. 0.3%. While the annual reading of the same index may show the stability of growth at 1.8%, and the core annual reading of the same index may reflect the acceleration of growth to 2.3% vs. 2.2%.

This comes in conjunction with the release of the index of claims for the past week on September 7, which may reflect a decrease of 2 thousand applications to 215 thousand applications compared to 217 thousand tabs the previous weekly reading, while the reading of the claims application index may show investors for the past week at the end of Last August, an increase of 13 thousand applications to 1,675 thousand applications compared to 1,662 thousand applications in the previous weekly reading.

Otherwise, yesterday, US President Donald Trump renewed his criticism of the Federal Reserve and its governor Jerome Powell and demanded a “zero or less” rate cut, less than a week before the September 17-18 FOMC meeting. To reveal the expectations of the members of the Committee on growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

Technical Analysis

EUR / USD is trading above 1.1005, which holds our expectations for the bullish intraday direction, which aims to test the resistance of the descending channel around 1.1095 before returning to resume the main bearish trend again.

The breach of the mentioned resistance will extend the bullish wave to target 1.1180, while a break of 1.1005 will stop the expected rally and pressure the price to head towards 1.0857 mainly.

Expected trading range for today is between 1.0950 support and 1.1100 resistance.

Expected trend for today: Temporarily bullish.