EUR analysis 31.01.2020

The single currency fluctuated the euro in a narrow range slanting toward a decline during the Asian session, to prepare for its weekly losses in a row and its longest march of weekly losses since the first half of 2018 against the US dollar on the cusp of developments and economic data expected on Friday by the economies of the euro area and the American economy is greater An economy in the world and in the midst of the aspiration for Britain to officially exit the European Union today.

At exactly 05:37 AM GMT, the euro against the US dollar fell 0.06% to 1.1025 levels compared to the opening levels at 1.1032, after the pair achieved its lowest level during the trading session at 1.1023, while achieving the highest at 1.1036.

The markets are currently looking to the French economy, the second largest in the region, to disclose the growth data for the fourth quarter with the release of the initial reading of the GDP index, which may reflect a slowdown in the pace of growth to 0.2% compared to 0.3% in the third quarter, as the annual reading of the indicator may show a slowdown The growth rate increased to 1.2% compared to 1.4% in the third quarter annual reading.

This comes before we witness by Germany, the largest economy in the euro area, the disclosure of the retail sales index, which may reflect a 0.5% decline compared to a rise of 2.1% last November, while the annual reading of the same indicator may show an acceleration of growth to 4.5% compared to 2.8 %, Before we witness from France the preliminary reading of the CPI, which may indicate a contraction of 0.5%, compared to a growth of 0.1% last December.

To reveal the growth data for the fourth largest economy in the euro area Spain with the release of the initial reading of the GDP index, which may reflect the stability of the pace of growth during the fourth quarter at 0.4%, little changed from the third quarter, in conjunction with the release of the annual reading of the consumer price index for Spain, which may It reflects the acceleration of growth to 1.0% versus 0.8% in the prior annual reading for November.

Investors are also looking to disclose the growth data of the third largest economy in the euro area Italy with the release of the initial reading of the GDP index, which may reflect the stability of the pace of growth during the fourth quarter at 0.1%, little changed from the third quarter, before we witness the economies of the region as a whole. On inflation data, with the release of the annual CPI reading, which may reflect the acceleration of growth to 1.4% against 1.3% in December, while the substantial annual reading of the same indicator may show slowing growth to 1.2% versus 1.3%.

Up to the disclosure of the growth data for the eurozone economies as a whole with the release of the initial reading of the GDP index, which may reflect the stability of the pace of growth during the fourth quarter at 0.2%, little changed from what it was in the third quarter, while the seasonally adjusted annual reading of the output indicator may show The total domestic economy of the region as a whole slowed the pace of growth to 1.1% versus 1.2% in the previous reading for the third quarter.

On the other hand, investors are currently awaiting by the US economy to disclose spending and personal income data, which may reflect a slowdown in personal spending growth to 0.3% versus 0.4% last November, and a slowdown in personal income growth to 0.3% compared to 0.5% in August November, while a reading of the core personal consumption expenditures index may show the stability of the pace of growth in December at 0.1%.

This comes in conjunction with the disclosure of the unit labor cost index reading, which may reflect the stability of growth at 0.7%, little changed from what it was in the third quarter, and before we witness the disclosure of industrial bottom data for the largest industrial country in the world with the release of the Chicago PMI reading Which may reflect the stability of the contraction at 48.9, little changed from last December.

To reveal the final reading of the University of Michigan's index of consumer confidence, which may show the stability of the expansion at 99.1 unchanged from the initial reading of the previous month this month and against 99.3 in December, and this comes hours after the Federal Open Market Committee meeting, which approved the monetary policy makers The Federal Reserve has cut interest rates for the third consecutive meeting by 25 basis points, between 1.50% and 1.75%.

Technical analysis

The pair of the euro against the dollar presented slight positive trades yesterday to test the moving average 50, and begins the day with a bearish tendency in a sign of the price trend to resume the expected downside direction for the coming period, noting that the stochastic indicator provides a negative crossover indication that we are waiting to stimulate the price to achieve more decline.

Consequently, our bearish outlook will remain valid for today, with a reminder that our targets start at 1.0985 and extend to 1.0880, while achieving it requires stability below 1.1085.

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

Expected trend for today: bearish.