EUR analysis 23.01.2020

The single currency fluctuated the euro in a narrow range slanting back down during the Asian session to witness its bounce to the ninth session in seventeen sessions from its highest since the seventh of last August against the US dollar on the cusp of developments and economic data expected today Thursday by the economies of the euro area and the American economy, which The decisions and attitudes of the monetary policy makers of the European Central Bank and the press conference of the European Central Bank governorate include Christine Lagarde and in the shadow of the World Economic Forum 2020 events.

At 05:28 am GMT, the euro against the US dollar fell 0.09% to 1.1083 levels compared to the opening levels at 1.1093, after the pair achieved its lowest level during the trading session at 1.1080, while achieving the lowest at 1.1100.

Investors are looking for the economies of the eurozone as a whole for the outcome of the European Central Bank meeting, during which the European monetary policy frameworks are expected to be reviewed and monetary policy makers endorsing interest rates at their current zero levels and stabilizing the marginal lending rate at 0.25% in addition to maintaining a rate Interest on deposits is negative -0.50% and proceed with the quantitative easing program at 20 billion euros per month.

This comes before we witness the activities of the press conference of the European Central Bank Governor Christine Lagarde, which is expected to participate tomorrow, Friday, in a panel discussion entitled "Global Economic Prospects" in the last days of the World Economic Forum 2020 in Davos, otherwise the markets look to later in the day to reveal Read the consumer confidence index for the euro area economies as a whole which may reflect the stability of the decline at its value of 8 during this month.

On the other hand, investors are currently looking for the US economy to publish a reading of the aid requests index for the previous week on January 18, which may reflect an increase of 10 thousand requests to 214 thousand applications compared to 204 thousand requests in the previous weekly reading, while a reading of the index may Subsidy applications Investors for the previous week on the 11th of this month decreased by 17 thousand requests to 1,750 thousand requests compared to 1,750 thousand requests.

This comes before we witnessed by the largest economy in the world and the largest industrialized world in the world, the disclosure of the reading of the leading indicators, which may show a 0.2% decline against stability at zero levels last November, in conjunction with the entry of the World Economic Forum in Davos, which is entering Switzerland. On its third day in a row, during which the attendees discuss the latest developments on the world stage, on the political and economic levels.

It is reported that US President Donald Trump noted yesterday from Davos that the Federal Reserve is harming economic growth and stock market gains, expressing that without the interest rate hike on federal funds, the Dow Jones index would rise by an additional ten thousand points, explaining that the strength of the green currency is hurting the United States’s exports and industrial activities, And adding that the US dollar should be weakened.

In the same context, he praised in Davos last Tuesday what his administration reached in terms of trade deals and economic achievements for his country, noting the trade agreements concluded with China, Mexico and Canada, with his statement that the second stage of the trade agreement between Washington and Beijing will start soon and that Tariffs exist during the second stage talks, adding that there is a good relationship with his Chinese counterpart Xi Jinping.

Then President Trump warned that his administration would impose 25% customs duties on European cars in the event that a fair trade agreement between Washington and Brussels was not reached, with a threat to impose 100% customs duties on French wine, and informed him that France would stop imposing fees on Internet companies. For the time being he has no intention of meeting the Ukrainian Prime Minister at the forum.

Technical analysis

The euro against the dollar trading stabilizes at the support of the main bullish channel, and we are still waiting for the rebound up to resume the expected bullish trend in the short and the long term, and that depends on the stability above the mentioned support.

Thus, we will maintain the bullish scenario if the 1.1070 level is not broken and it remains intact with a daily closing below it, noting that our main awaited targets start with testing the 1.1180 level.

The expected trading range for today is between 1.1030 support and 1.1180 resistance.

Expected trend for today: bullish.