EUR analysis 30.01.2020

The single currency fluctuated the euro in a narrow range tilted to the upside during the Asian session to witness its bounce for the second session from the lowest since November 29, when it tested the lowest since October 10 against the US dollar on the cusp of developments and economic data expected Thursday By the economies of the euro area and the US economy the largest economy in the world.

At 05:21 am GMT, the euro pair rose against the US dollar by 0.15% to 1.1015 levels compared to the opening levels at 1.1010, after the pair achieved its highest level during the trading session at 1.1008, while achieving the lowest at 1.1018.

Markets are currently looking to Germany, the largest economy in the eurozone, to disclose the preliminary reading of the consumer price index, which may reflect a 0.6% contraction versus 0.5% growth last November, before we also witness from Germany the release of the unemployment change index, which may It reflects a rise of 5 thousand compared to a rise of 8 thousand in the previous reading of last December.

This comes before we witness from Italy, the third largest economy in the region, the release of the unemployment rate reading, which may appear stable at 9.7%, little changed from the previous reading in November, until the release of the unemployment rate reading for the euro area as a whole, which may also indicate stability at 7.5 % During November,

On the other hand, investors are currently looking for the US economy to disclose the initial reading of the GDP of the United States for the fourth quarter, which may show the stability of the pace of growth for the largest economy in the world at 2.1%, little changed from what it was in the third quarter, as it may reflect The initial reading of the GDP measured by prices for the past quarterly quarter, the stability of the pace of growth at 1.8%, also remained unchanged from the third quarter.

This comes in conjunction with the issuance of the index of subsidy requests for the last week on January 25th, which may reflect an increase of 4 thousand applications to 215 thousand applications, and hours after members of the Federal Open Market Committee unanimously approved to stay short-term reference interest rates between 1.50% and 1.75% for the third consecutive meeting during the Federal Commission meeting held on January 28-29 in Washington.

In the same vein, we followed yesterday, Federal Reserve Governor Jerome Powell stated during his press conference following the Federal Committee meeting, that the decisions of the committee depend on the economic data received, while touching that if inflation rates continue to fall below the Federal Reserve’s goal, then that This could lead to lowering inflation expectations and thus lowering interest, adding that inflation is expected to reach the target within the next three months.

Powell noted that the Federal Reserve is seeking to avoid stabilizing inflation below the target of two percent, while stating that there will be slight adjustments to the mandatory reserve surplus and that the general budget will continue to expand over time, adding that the Federal Reserve expects support from repurchases next April. , And he pointed out that it is unfortunate that the spread of the Corona virus and that it is expected to have a negative impact on the Chinese economy.

Powell also expressed the fact that the Federal Reserve is closely monitoring the situation regarding the spread of the Corona virus and its impact on the economy, while stating that there are some cautious optimism about the global economy, pointing out that financial conditions are improving and trade tensions have declined, indicating that his country signed with China for the first stage of the trade agreement. Between the two parties, this is in addition to the decrease in the chances of Britain leaving without an agreement from the European Union, which contributes to supporting the positive expectations.

Technical analysis

The euro against the dollar pair offers slight positive trades after approaching a few points difference from our first awaited target at 1.0985, where the price is affected by the positivity of the stochastic indicator, while the moving average 50 continues to press negatively on the price, to support the chances of resuming the expected bearish direction for the next period, whose next target exists At 1.0880.

We point out that the negative effect of the head and shoulders pattern is still effective, while a break of 1.1085 is a positive factor that will stop the current negative pressure and lead the price to restore the bullish track again.

The expected trading range for today is between 1.0940 support and 1.1085 resistance.

Expected trend for today: bearish.