EUR analysis 03.02.2020

The single currency fluctuated the euro in a narrow range slanting back down during the Asian session to witness its bounce for the second session from its top since January 23 against the US dollar on the cusp of developments and economic data expected today Monday by the economies of the euro area and the US economy the largest economy in the world In the wake of Britain's formal exit from the European Union.

At exactly 04:59 AM GMT, the euro against the US dollar fell 0.02% to 1.1082 levels compared to the opening levels at 1.1084, after the pair achieved its lowest level during the trading session at 1.1068, while it achieved the highest at 1.1096, knowing that The pair started the trading session on a falling price gap after it concluded the trading last week at 1.1093.

The markets are currently looking to reveal the data of the industrial sector from Spain, the fourth largest economy in the euro area, with the release of the Manufacturing Purchasing Managers Index, which may reflect a contraction of deflation to 48.3 compared to 47.4 in December, before we witness the disclosure of the same indicator reading for Italy The region's third largest economy, which may also show contraction shrinking to 46.9 from 46.2 in December.

This comes before we witness the release of the final reading of the PMI for France, the second largest euro area economy, and Germany the largest economy in the region, in addition to the eurozone economies as a whole, which may reflect the stability of the expansion at a value of 51.0 in France compared to 50.4 in December, and the stability of deflation At 45.2 in Germany versus 43.7, the contraction also stabilized at 47.8 in the region as a whole compared to 47.8 in December.

On the other hand, investors are currently looking for by the US economy, the largest economy in the world, to disclose the final reading of the PMI index by Markit for the United States of America, the largest industrial country in the world, which may reflect the stability of the expansion at a value of 51.7, with little change from the reading For the month of January, and against a value of 52.4 in December.

This comes before we witness the disclosure of the Institute of Industrial Supply index reading, which may show contraction shrinkage to 48.5 compared to 47.2 in December, while the reading of the Institute of Industrial Supply measured in prices may expand to 52.0 compared to 51.7 in December, in conjunction with the release of the construction spending index, which reflects a slowdown in growth to 0.5% compared to a decline of 0.6% in November.

Technical analysis

The euro against the dollar pair conducted a retest of the broken support for the upside channel that appears in the image and maintained its stability below it, in conjunction with the appearance of Significant saturation signals in the purchase through the stochastic, waiting for the price to be stimulated to rebound down to resume the expected downside for the coming period, which aims to test the level Initially 1.0985.

Thus, the bearish trend scenario will remain valid unless the pair presents additional positive trades to breach the 1.1090 level and settles above it, noting that the negative effect of the head and shoulders pattern is still effective.

The expected trading range for today is between 1.0985 support and 1.1140 resistance.

Expected trend for today: bearish.