EUR analysis 20.02.2020

The euro currency fluctuated in a narrow range that tilted back down during the Asian session to reflect its stability near its lowest level since the third week of April 2017, when trading began on an upward price gap after the French President Emmanuel Macron won the French main elections against the US dollar on the cusp of developments The economic data expected on Thursday by the economies of the euro area and the US economy, the largest economy in the world.

At 05:02 am GMT, the euro against the US dollar fell 0.06% to 1.0799 levels compared to the opening levels at 1.0805, after the pair achieved its lowest level during the trading session at 1.0792, while achieving the highest at 1.0815.

Investors, by the largest Eurozone economies, are looking to Germany to reveal a statistical reading of the GFK consumer confidence index that may reflect the stability of the expansion at 9.9 during March, in conjunction with the release of the producer price index, which is an initial indication of inflationary pressures and that may show stability Growth at 0.1% during January, while the annual reading of the same indicator may show widening contraction to 0.4% versus 0.2%.

This comes before we witnessed by the second largest economy in the euro area, France, the final reading of the consumer price index, which may reflect the stability of the deflation at 0.4%, little changed from the initial reading of the previous month of January and against the growth of 0.4% last December. Up to the ECB's disclosure of the ECB monetary policy meeting held on January 23.

By mentioning that the monetary policy makers of the European Central Bank kept at the bank’s last meeting on interest rates at their zero levels and the marginal lending rate at 0.25% while remaining on the interest rate on deposits -0.50%, while proceeding with the quantitative easing program at 20 billion euros per month which It was activated last November as long as needed.

In the same vein, we followed yesterday. The advisor to the chief commercial commissioner in the European Union, Stefan de Rink, expressed the fact that the European Union assured Britain some time ago that any trade agreement with it must include the rules of fair competition between the two parties, adding that trade talks with Britain will be difficult. To some extent, it will probably be more difficult than it was to negotiate over Britain's exit from the European Union.

Otherwise, we also followed yesterday. German Finance Minister Olaf Schultz reported that there are no signs of stagnation in his country's economy, adding that the G20 meeting, which will take place on 22-23 of this month, is expected to result in the capital of the Kingdom of Saudi Arabia, Riyadh, which will be at the level of Finance ministers of the twentieth countries, on the agreement about the minimum tax on companies, especially technology giants.

German Finance Minister Schultz also stressed the importance of the Group of Twenty countries to support global economic growth, especially in the shadows of fears of the spread of the Coruna virus, adding that we must ensure that we are able to take the necessary steps, with his statement that until now they continue to monitor developments related to the virus The killer, adding that he expected the largest economies of the euro area 1.1% this year despite the repercussions of the coronavirus.

On the other hand, investors are currently waiting for the US economy to disclose data on the industrial sector with the release of the Philadelphia Industrial Index reading, which may reflect a shrinkage in breadth to 10.1 compared to 17.0 last January, and this comes in conjunction with the release of the index of aid requests for the week Last February 15th, which may reflect a rise of 5 thousand requests to 210 thousand requests compared to 205 thousand requests in the previous weekly reading.

This also comes in conjunction with the issuance of the reading of the continuous benefit requests index for the past week on the eighth of this week, which may reflect an increase of 19 thousand applications to 1,717 thousand applications compared to 1,698 thousand requests in the previous weekly reading, up to the disclosure of reading the leading indicators that may appear Up 0.4%, compared to a decline of 0.3% in December.

This comes hours after the minutes of the Federal Open Market Committee meeting held on January 28-29, during which members of the committee approved the maintenance of short-term benchmark interest rates between 1.50% and 1.75% for the third meeting, respectively. The minutes mentioned that the current monetary policy is appropriate and will remain in place for some time, indicating that the interest on federal funds remains unchanged during the coming period.

Technical analysis

The narrow range has dominated the trading of the euro against the dollar since yesterday, which maintains its stability below the 1.0800 barrier, and therefore, the bearish trend scenario will remain as it is without change for the next period, supported by the negative pressure that the moving average 50 constitutes, noting that our targets Awaited starts at 1.0760 then 1.0680, while achieving it requires stability below 1.0860.

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

Expected trend for today: bearish.