EUR analysis 27.01.2020

The euro currency fluctuated in a narrow range tilted to the upside during the Asian session to witness its bounce to the second session from the lowest since the second of December against the US dollar on the threshold of developments and economic data expected on Monday by the largest economies of the euro area Germany and the US economy, which includes talk Registered for the Federal Open Market Committee member and New York Federal Reserve Chairman John Williams.

At 05:33 am GMT, the euro pair rose against the US dollar by 0.04% to 1.1027 levels compared to the opening levels at 1.1023, after the pair achieved its highest level during the trading session at 1.1037, while achieving the lowest at 1.1021.

Markets are looking to Germany to reveal the IFO reading of the business climate, which may show a widening of 97.1 versus 95.0 in December, as the reading of the same indicator may show a widening of 94.8 to 93.8, and the same reading of the assessments may reflect The current rate also widened to 99.1 versus 98.8 in December.

Otherwise, investors are waiting for the end of the week and the current month for Britain to officially exit the European Union following the signing by the President of the European Commission and the European Council at the end of last week of the agreement of the United Kingdom’s withdrawal from the united bloc in preparation for its presentation to Parliament in the united bloc before tomorrow after Wednesday, and it is reported that European Commission President Ursula von Derlin recently confirmed that signing the agreement ends the period of uncertainty.

On the other hand, the markets are looking forward to presenting Federal Committee member and President of the New York Federal Reserve John Williams opening remarks in Puerto Rico Beach in San Juan, via a pre-recorded video, before the US housing market data is revealed with the release of the New Home Sales Index, which It may explain the acceleration of growth to 1.6% or about 731 thousand homes compared to 1.3% at about 719 thousand homes in November.

This comes hours before the disclosure of tomorrow, Tuesday, the reading of the durable goods orders index, which represents about half of the consumer spending that represents more than two thirds of the gross domestic product in the United States, which may reflect a rise after its decline in November, before the release of the confidence index reading Consumers for the current month, which may reflect a widening from what it was in December.

Up to the start of the activities of the Federal Open Market Committee meeting January 28-29 in Washington, which is expected to remain on the short-term benchmark interest rates for the third consecutive meeting at between 1.50% and 1.75%, before the press conference to be held Federal Reserve Governor Jerome Powell half an hour after the FOMC meeting meeting expires on Wednesday.

After that, next Thursday, the markets are looking to reveal the initial reading of the United States’s GDP for the fourth quarter, which may show the fastest growth of the largest economy in the world to 2.2% compared to 2.1% in the third quarter, while the initial reading of the measured GDP may reflect Prices for the last quarter quarter stabilized at a pace of 1.8%, little changed from what it was in the third quarter.

Technical analysis

The euro against the dollar creep negatively to gradually approach our first awaited negative target at 1.0985, and it falls under the negative pressure formed by the EMA50, to support the chances of extending the descending wave during the coming period, noting that exceeding the mentioned level will push the price to 1.0880.

Therefore, we will continue to favor the bearish trend for the next period unless the price rushes to breach the 1.1080 level and stability above it.

The expected trading range for today is between 1.0940 support and 1.1080 resistance.

Expected trend for today: bearish.