EUR analysis 07.02.2020

The euro fluctuated in a narrow range slanting back down during the Asian session to witness its stability near its lowest level since mid-October last against the dollar on the threshold of economic developments and data expected on Friday by the economies of the euro area and the US economy the largest economy in the world and in conjunction with the visit of the European Commissioner Phil Hogan to Washington for talks with US Trade Representative Robert Lighthizer as part of efforts to boost transatlantic trade and the signing of a trade agreement between the United States and the European Union.

At 05:12 am GMT, the euro against the US dollar fell 0.01% to 1.0982 levels compared to the opening levels at 1.0983, after the pair achieved its lowest level during the trading session at 1.0978, while achieving the highest at 1.0985.

Markets are currently looking to Germany, the largest economy in the euro area, to disclose the current account reading, which may reflect a shrinking surplus to 23.5 billion euros against 24.9 billion euros last November, in conjunction with the release of the trade balance reading, which may also show a shrinking surplus To 16.4 billion euros, compared to 18.3 billion euros in November, amid expectations for an increase in exports and imports during December.

This comes in conjunction with the issuance of the seasonally adjusted reading of the industrial production index also for Germany, which may reflect a 0.2% decline against a rise of 1.1% in November, while the annual reading of the same indicator may show a widening decline to 3.7% compared to 2.6%, before we witness from Before France, the region’s second economy, the industrial production index showed a decline of 0.3%, compared to a rise of 0.3% in November.

Investors are also anticipating by France the preliminary reading of the wage index in the private sector, which may reflect the stability of growth at 0.2% during the fourth quarter, in conjunction with the release of the trade balance reading also for France, which may explain the deficit shrinking to a value of 5.1 billion euros against 5.6 billion euros In November, before we witnessed by Italy, the region's third largest economy, the retail sales readout, which may show a 0.2% increase compared to a 0.2% decline.

On the other hand, we have just followed the talk of a member of the Federal Open Market Committee and Deputy Governor of the Federal Reserve Randall Quarlis about monetary policy and economic expectations at New York University, and this came amid the markets' aspiration to reveal the data of the American labor market last month, which may reflect the stability of unemployment rates at The lowest in five decades at 3.5% for the third month in a row.

In the same context, investors are also looking to the US economy for the release of the employment change index for sectors other than agriculture, which may reflect the acceleration of the pace of job creation to 163,000 jobs compared to 145,000 jobs last December, as the average income index reading in The hour, growth accelerated to 0.3% versus 0.1%. This is before the final reading of the wholesale stocks index, which may explain the stability of the decline at 0.1%.

Technical analysis

The EURUSD pair succeeded in touching our first awaited target at 1.0985 and surpassing it to settle below it now, which supports expectations for the continuation of the downside trend during the coming period, paving the way for heading towards our next target, which is located at 1.0880.

The negative impact of the head and shoulders pattern is still effective and supports the expectations of achieving further decline, noting that a break of 1.1030 could push the price to test 1.1100 areas before any new attempt to decline.

The expected trading range for today is between 1.0880 support and 1.1030 resistance.

Expected trend for today: bearish.