EUR analysis 19.02.2020

The euro currency fluctuated in a narrow range slanting upward during the Asian session to witness its bounce to the second session from the lowest since the third week of April 2017 (when trading began on an upward price gap after the French President Emmanuel Macron won the main French elections at the time) against the US dollar On the cusp of developments and economic data expected on Wednesday by the economies of the euro area and the US economy, which include the speech of members of the Federal Open Market Committee and the disclosure of the minutes of the Federal Reserve meeting.

At exactly 05:38 AM GMT, the euro pair rose against the US dollar by 0.04% to 1.0796 levels compared to the opening levels at 1.0792, after the pair achieved its highest level during the trading session at 1.0804, while achieving the lowest at 1.0791.

The markets are looking for the eurozone economies as a whole to reveal the seasonally adjusted reading of the current account index, which may reflect the widening of the surplus to 34.5 billion euros against 33.9 billion euros last November. Otherwise, we followed yesterday the European Union Trade Commissioner Phil Hogan On the fact that any damage that may be caused to the British economy after the expiry of the transitional period that follows Britain's exit from the Union lies entirely with Britain.

In the same context, Trade Commissioner Hogan noted that the European Union is seeking to maintain strong economic cooperation with the United Kingdom, while stating that reaching any free trade agreement between Brussels and London must include a number of criteria, including competition and environmental standards, explaining that the union seeks To reach an equitable solution, while Britain does not want this, adding that any future turmoil between the two parties is up to Britain and has full responsibility.

On the other hand, investors are currently awaiting by the US economy the disclosure of the producer price index reading, which is an initial indicator of inflation, which may reflect the stability of growth at 0.1% compared to during December, while the fundamental reading of the same indicator may show acceleration of growth to 0.2% against 0.1%,

This also comes in conjunction with the disclosure of housing market data, with the release of both the beginning construction index and the building permit index, and amid expectations that the reading of the building permits index will reflect a 2.1% increase to about 1,450 thousand permits compared to a decline of 3.9% at 1,416 thousand permits in December / December, while the reading of the index of start-up homes, may reflect a decline of 12.0% to about 1,415 thousand homes compared to a rise of 16.9% at 1,608 thousand homes.

Reaching the upcoming event today, the Federal Reserve revealed the minutes of the Federal Open Market Committee meeting held on January 28-29, in which the Federal Reserve monetary policy makers decided to keep interest rates on federal funds at between 1.50% And 1.75% for the third consecutive meeting at the time.

Technical analysis

The euro against the dollar is moving below the 1.0800 barrier, and the price continues to crawl towards our expected target at 1.0760, while the price organizes inside a descending channel that supports chances of achieving further decline during the coming period, noting that exceeding the mentioned level will push the price to 1.0680 as the next station.

Thus, the downside scenario will remain dominant unless 1.0860 level is breached and stability is maintained with daily closing above it.

The expected trading range for today is between 1.0700 support and 1.0860 resistance.

Expected trend for today: bearish.