EUR Analysis 28.10.2019

The single currency of the European Union fluctuated in a narrow range tilted to decline during the Asian session to witness the bounce for the fifth session in six sessions from the highest since August 14 against the US dollar on the eve of developments and economic data expected on Monday The largest economy in the world.

At 05:20 AM GMT the EURUSD fell 0.01% to 1.1081 levels compared to the opening at 1.1082, after the pair reached its lowest level during the session at 1.1076, while the pair achieved the highest at 1.1086.

Markets from Germany, the euro zone's largest economy, are eyeing the import price index, which may reflect a rise of 0.1% versus a decline of 0.6% last August. Both showed stable growth of 3.4% and 5.7%, respectively, unchanged from the prior August reading.

Otherwise, markets are awaiting the European Union's decision on the British government's recent request to extend the UK's exit from the EU by three months, the end of January. The EU decision was supposed to be unveiled last Friday. But EU ambassadors did not reach agreement on the extension period at the time.

French President Emmanuel Macron recently asked for a maximum extension of Britain's exit from the European Union until November 15, saying he wanted to increase pressure on the British parliament to support Prime Minister Boris Johnson's recent exit deal with the EU. Brussels, he said, feared that prolonging the exit timeframe for a long time could again lead to the possibility of an exit scenario without agreement.

British Prime Minister Johnson noted last Thursday that he would allow the British parliament enough time to discuss the UK's Brexit agreement and exit timetable if a general election is approved on December 12, adding that he expects EU leaders agree to an extension beyond 31 October.

If the EU decides to extend the deadline for Brexit for a short period of two weeks or a month, until mid-November or the end of next month, Prime Minister Johnson may work to pass his exit agreement with Brussels again through the British Parliament. In the case of a three-month extension, Johnson is expected to call parliament to vote on early general elections.

On the other hand, investors are currently awaiting the US economy to reveal the initial reading of the wholesale inventory index which may reflect the acceleration of the pace of growth to 0.3% vs. 0.2% in August. $ 73.5 billion compared to $ 72.8 billion in August.

On the other hand, markets are looking ahead to Tuesday's opening of the FOMC meeting in Washington, which is expected to cut the federal funds rate by 25 basis points for the third consecutive meeting to between 1.50% and 1.75% ahead of the Bank Governor's upcoming press conference. Federal Reserve Jerome Powell on Wednesday, following US President Donald Trump's demand for further stimulus and rate cuts.

Investors are also looking to unveil the preliminary third quarter GDP for the United States on Wednesday, which could show a slowing pace of growth for the world's largest economy to 1.6% versus 2.0% in the second quarter. The quarterly growth slowed to 1.8% from 2.4% in the second quarter.

Preliminary data on the US labor market is also expected to be released on Wednesday with the release of the private sector employment change, which may reflect a slower pace of job creation to 125,000 jobs versus 135,000 in September, hours before the release. Monthly Non-Farm Payrolls and Unemployment Rate plus Hourly Income for October.

Technical Analysis

EURUSD faced additional negative pressure to breach the 1.1105 level and approach the pivotal support of 1.1065.As noted in our recent reports, the price needs to hold above this level to keep the positive scenario valid for the coming period, as breaking it will push the price for further bearish correction and target 1.0995 levels initially. .

Now, the price needs to breach through 1.1105 to confirm the resumption of the bullish trend, supported by the positive signal provided by Stochastic, with the first major positive target at 1.1180.

Expected trading range for today is between 1.1000 support and 1.1180 resistance

Expected trend for today: Bullish