EUR analysis 14.02.2020

The single currency fluctuated the euro in a narrow range slanting back down during the Asian session to witness the lowest since April 24 of 2017 against the US dollar on the threshold of developments and economic data expected on Friday by the economies of the euro area and the US economy the largest economy in the world.

At exactly 05:20 AM GMT, the euro against the US dollar fell 0.06% to 1.0835 levels compared to the opening levels at 1.0841, after the pair achieved its lowest level in three years at 1.0827, while achieving the highest during the trading session at 1.0843.

Markets are currently awaited by the largest economies of the euro area, Germany, to reveal the seasonally adjusted preliminary reading of the fourth quarter GDP indicator, which may reflect stability at 0.1%, little changed from the last third quarter, while the seasonally adjusted annual reading of the same indicator may show a slowdown The growth rate increased to 0.2% compared to 1.0% in the previous annual reading for the third quarter.

This comes in conjunction with the release of the wholesale stocks price index reading also for Germany, which may reflect a 0.1% increase against stability at zero levels last December, before we witness from Italy the third largest economy in the region the release of the trade balance reading, which may explain the widening surplus to 5.23 billion euros, compared to 4.87 billion euros in December.

In order to reveal the seasonally adjusted preliminary reading of the euro area GDP indicator, which may reflect the stability of growth at 0.1% unchanged from the third quarter, as the annual reading of the index may show the stability of growth at 1.0%, in conjunction with the initial reading of the change in employment index showed stability Growth at 0.1%, and the seasonally adjusted reading of the Trade Balance Index showed the surplus narrowed to 19.1 billion euros from 19.2 billion euros in November.

On the other hand, investors are looking to the US economy to reveal the retail sales reading, which represents about half of consumer spending, which represents more than two-thirds of the gross domestic product of the United States, and that may reflect the stability of growth at 0.3%, little changed from the previous reading of the month December, while a substantial reading of the same indicator may show a slowdown in growth to 0.3% versus 0.7% in December.

This comes in conjunction with the release of the import price index, which may explain a 0.2% decline against a rise of 0.3% in December, while the annual reading of the same indicator may show a slowdown in the pace of growth to 0.1% versus 0.5%, before we witness the disclosure of industrial sector data For the largest industrialized country in the world with the release of the industrial production index, which may reflect a decline in the decline to 0.2% compared to 0.3% in December.

In the same context, the reading of the energy utilization index may show a decrease to 76.9% compared to 77.0% in December, before we witness the disclosure of the preliminary reading of the University of Michigan index of consumer confidence, which may show a widening of the value to 99.5 compared to 99.8 in December. Last January, in conjunction with the release of the business inventories reading, which may explain an increase of 0.1% compared to a decline of 0.2% in November.

To the talk of Federal Open Market Committee member and President of the Federal Reserve Cleveland Bank Loretta Mester about payment updates at the University of South Florida in Sarasota, and this comes hours after the activities of the semi-annual certification of the Governor of the Federal Reserve Jerome Powell about monetary policy before each of the Financial Services Committee In the House of Representatives last Tuesday and the Banking Committee in the Senate last Wednesday.

Technical analysis

The EURUSD pair managed to confirm a break of the 1.0860 level after the daily candle closed below it, which opens the way for the continuation of the downside trend in the medium and long term, awaiting the direction towards 1.0760 as the next main station.

Thus, the bearish bias will remain likely for the coming period supported by the negative pressure formed by the EMA50, noting that breaching 1.0860 and holding above it will stop the current negative pressure and lead the price to start recovery attempts targeting the 1.1035 areas initially.

The expected trading range for today is between 1.0750 support and 1.0900 resistance.

Expected trend for today: bearish.