EUR Analysis 08.10.2019

The single currency of the European Union fluctuated in a narrow, bullish range during the Asian session to see its fifth session rebound in six sessions from the lowest since May 12, 2017 against the US dollar on the eve of developments and economic data expected on Tuesday by euro zone economies The US economy is the largest in the world, including Federal Reserve Governor Jerome Powell's speech.

At 05:13 am GMT the EURUSD rose 0.04% to 1.0975 levels from the opening at 1.0971 after the pair reached its highest level during the session at 1.0978, while the lowest level at 1.0965.

Markets are looking for Germany, the euro zone's largest economy, to release the seasonally adjusted industrial production index, which may reflect a contraction in the decline to 0.2% from 0.6% in August, before we see the trade balance reading for France, the second largest economy in the region, which may show contraction. The deficit amounted to 4.23 billion euros compared to 4.61 billion euros in July.

This comes before we see Italy, the region's third largest economy, the retail sales figure which may show the decline shrank to 0.1% from 0.5% in July. Otherwise, we followed earlier this week the European Commission expressed the need for the euro zone More proactive fiscal stimulus, with fiscal stimulus being more effective than increasing monetary stimulus.

On the other hand, investors are awaiting the US economy to reveal the PPI reading, which is a preliminary indicator of inflationary pressures which may reflect the stability of growth at 0.1%, little changed from last August, while the core reading of the index itself may appear. The pace of growth slowed to 0.3% vs. 0.2%, and the annualized reading of the same index may show stability at 1.8%.

In the same context, the core annual PPI reading may reflect a stable growth rate of 2.3%, little changed from the previous annual reading in August, before we see the FOMC member and Chicago Fed Chairman Charles. Evans at the Chicago Rotary Lunch.

Federal Reserve Governor Jerome Powell delivered a speech titled "A Look from the Federal Reserve" at the annual meeting of the National Association of Business Economics in Denver, hours after Powell expressed the importance of the Fed's independence away from politics, and before his participation tomorrow. In a panel discussion the Federal Reserve listens in Kansas City.

Also on Wednesday, the markets are looking forward to the release of the minutes of the FOMC meeting held on September 17-18, during which it was decided to cut interest rates on federal funds for the second time in a row by 25 basis points to between 1.75% and 2.00%. This came in line with the expectations, with the disclosure at the time of the Committee's expectations on growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

Technical Analysis

EUR / USD continues to fluctuate at SMA 50, which is a good support barrier at 1.0965, as the price needs to break above this level to reinforce expectations that the main bearish trend will continue.

In general, we continue to favor the bearishness that prevails within the descending channel unless 1.1025 is breached and hold above it, noting that our next main target is at 1.0840, while a breach of 1.1029 is a positive factor that will push the price to start recovery attempts targeting initially 1.1180 areas.

Expected trading range for today is between 1.0870 support and 1.1050 resistance.

Expected trend for today: Overall bearish.