EUR Analysis 29.10.2019

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 seven sessions from its highest since August 14 against the US dollar amid the lack of economic data from the euro-zone economies and on the eve of developments and economic data expected today Tuesday by the US economy which includes the launch of the FOMC meeting.

At 04:27 AM GMT, the EURUSD fell 0.05% to 1.1095 levels compared to the opening at 1.1100, after the pair reached a session low of 1.1091, while the pair reached its highest at 1.1103.

At the weekend, we followed up with the President of the Council of Europe, Donald Tusk, saying that the UK's request for a three-month extension of the Brexit had been approved until 31 January 2020. In the same vein, the Prime Minister sent British Prime Minister Boris Johnson said in a letter to the president of the European Council that his government had formally approved the decision to extend the deadline for exit from the EU.

On the other hand, investors are awaiting the US economy to release housing market data with the release of the annual reading of the S&P House Price Index, which may show the acceleration of growth to 2.1% compared to 2.0% in July, before we see the release of sales Existing homes may show slower growth to 0.9% versus 1.6% in August.

This comes in conjunction with the release of the consumer confidence index, which may show an expansion to 128.2 vs. 125.1 last September, leading to the start of the meeting of the Federal Open Market Committee in Washington, which is expected to cut interest rates on federal funds by 25 points The basis for the third consecutive meeting is between 1.50% and 1.75%.

In the same context, the markets are looking forward on Wednesday after the end of the second day of the meeting of the Federal Open Market Committee about half an hour of the upcoming press conference of the Federal Reserve Governor Jerome Powell, which will present the decisions and directions of the Federal Reserve Committee, before opening the field for media questions. At the same time, US President Donald Trump has called for further stimulus and interest rate cuts.

Powell noted earlier that the risks to the US economy were the uncertainty over the US-China trade war and the UK's exit from the EU. Trump yesterday expressed his expectation of a trade deal with China at the Asia Economic Cooperation Summit. The Pacific (APEC) next month in Chile, along with Brussels's agreement yesterday to extend Britain's exit again, limits the chances of a rate cut at the Fed meeting.

Otherwise, investors are also looking ahead tomorrow to reveal the preliminary GDP reading for the US for the third quarter, which may show a slower pace of growth for the world's largest economy to 1.6% vs. 2.0% in the second quarter, and may reflect the preliminary reading of GDP measured in prices For the last quarter, growth slowed to 1.8% from 2.4% in the second quarter.

On Wednesday, the US labor market is set to release preliminary data, 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. On the monthly report on non-farm payrolls and unemployment rates plus hourly earnings for October.

Technical Analysis

EUR / USD is finding strong resistance at 1.1105, affected by the negativity of Stochastic and SMA 50, which may push the price to test 1.1065 over the coming sessions.

In general, we continue to favor the bullish trend unless it breaches the 1.1065 level and hold below it, as a breach will force the price to make further bearish correction and visit areas of 1.0995 initially, while a breach of 1.1105 is required to confirm the continuation of the bullish trend whose first target is located at 1.1180.

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

Expected trend for today: Bullish