EUR analysis 02.12.2019

The single currency fluctuated in a narrow, bullish range during the Asian session, witnessing its rebound for the second consecutive session from the lowest since October 10 against the US dollar on the eve of developments and economic data expected on Monday by euro zone economies, which includes a conservative testimony European Central Bank Christine Lagarde before the European Parliament in Brussels and the developments and economic data expected by the US economy the largest economy in the world.

At 05:58 AM GMT, the euro against the US dollar rose 0.05% to 1.1019 levels compared to the opening levels at 1.1013 after the pair reached its highest level during the trading session at 1.1027, while the lowest level at 1.1007, knowing that The pair started the session on a bearish price gap after it closed the week and last trading at 1.1018.

Markets are now looking to reveal the industrial sector data from Spain, the fourth largest economy in the euro zone, with the release of the manufacturing PMI which may reflect a widening contraction to 46.5 vs. 46.8 in October, before we see the same indicator for Italy. The region's third-largest economy may also reflect a widening deflation to 47.5 vs. 47.7 in October.

This comes before we see the final reading of the manufacturing PMI for France, the second largest economy in the euro zone and Germany, the largest economies in the region as well as the economies of the euro area as a whole, which may reflect the stability of the expansion at 51.6 in France compared to 50.7 in October, and the stability of deflation At 43.8 in Germany versus 42.1, deflation also stabilized at 46.6 in the region as a whole versus 45.9.

On the other hand, investors are awaiting the US economy to reveal the final reading of the manufacturing PMI by Markit from the US which may reflect the stability of the expansion at 52.2, little changed from the initial reading of last month and against 51.3 in October. Before we saw the release of the construction spending index, which reflects the slowdown in growth to 0.3% compared to 0.5% last September.

This comes in conjunction with the revelation by the world's largest industrialized countries that the ISM reading could show contraction shrinking to 49.2 vs. 48.3 in October. Its value was 47.0 versus 45.5 in October.

Technical Analysis

The EURUSD rally stopped at SMA 50, which met the minor resistance 1.1030, in conjunction with stochastic reaching overbought areas, supporting the chances of a bearish bounce and resuming the expected bearishness over intraday and short term, targeting mainly 1.0950 areas.

In general, we will continue to favor the bearishness for the coming period unless breaching 1.1065 and holding above it.

Expected trading range for today is between 1.0930 support and 1.1065 resistance.

Expected trend for today: Bearish.