EUR analysis 29.01.2020

The single currency fluctuated the euro in a narrow range slanting back down during the Asian session to witness its rebound to the eleventh session in twenty-one sessions from its highest since the seventh of August against the US dollar on the cusp of developments and economic data expected today Wednesday by the economies of the euro area and the American economy, which Includes Fed policy makers' decisions and directions and Fed Governor Jerome Powell's press conference in Washington.

At 05:23 am GMT, the euro against the US dollar fell 0.09% to 1.1012 levels compared to the opening levels at 1.1022, after the pair achieved its lowest level during the trading session at 1.1011, while it achieved the highest at 1.1028.

Investors, by the largest Eurozone economies, are looking to Germany to unveil a statistical reading of the GFK index of consumer confidence, which may reflect the stability of the expansion at a value of 9.6 during February, in conjunction with the release of the import price index for Germany, which may reflect a slowdown in growth to 0.2% against 0.5% last November, while the annual reading of the same indicator may show the decline decreased to 0.7% compared to 2.1%.

This comes before we witness the disclosure of the annual reading of the special loans index for the eurozone economies as a whole, which may clarify the stability of growth at 3.5%, little changed from the previous annual reading for the month of November, in conjunction with the release of the annual reading of the M3 money supply also for the economies of the region. The euro as a whole which may explain the slowdown in growth to 5.5% compared to 5.6% in November.

On the other hand, investors are anticipating by the US economy to disclose data for the month of December with the release of the merchandise trade balance reading, which may explain the widening deficit to $ 64.5 billion compared to $ 63.2 billion in conjunction with the release of the initial reading of the wholesale inventory index, which may reflect a rise of 0.1 % Versus a decline of 0.1%, all the way to revealing housing market data with the release of existing home sales, which may show a slowdown in growth to 0.5% versus 1.2%.

This comes in conjunction with the FOMC meeting, on January 28-29, during which it is expected that the short-term benchmark interest rates for the third consecutive meeting will be maintained between 1.50% and 1.75%, and look forward to the press conference’s activities. To be held by Powell Fed Governor half an hour after the FOMC meeting’s activities expire.

We would like to point out that US President Donald Trump just renewed his demand for the Federal Reserve to resume reducing interest on federal funds during its current meeting, in order to maintain interest rates in America compared to other countries, with his statement that if the Federal Reserve decides to cut rates The short-term reference interest is that his country will focus on paying its debts and refinancing it again.

Technical analysis

The EURUSD pair continues with a quiet decline to continue to approach our first target 1.0985, and the negative effect of the head and shoulders pattern whose features appear in the image remains effective, awaiting further decline during the upcoming sessions, with a reminder that our next target extends to 1.0880, while stability is below 1.1080 An important condition for the continuation of the expected decline.

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

Expected trend for today: bearish.