EUR analysis 26.02.2020

The euro currency fluctuated in a narrow range slanting back down during the Asian session to witness its bounce for the second session from the top since February 12 against the US dollar amid the scarcity of economic data by the economies of the euro area and on the cusp of developments and economic data expected on Wednesday by the American economy The largest economy in the world which includes the talk of members of the Federal Open Market Committee.

At 05:14 am GMT, the euro against the US dollar fell 0.11% to 1.0870 levels, compared to the opening levels at 1.0882, after the pair achieved its lowest level during the trading session at 1.0862, while achieving the highest at 1.0883.

On Tuesday, we followed up, the European Union's chief negotiator told Britain’s exit file, Michel Barnier, that trade negotiations between the European Union and Britain will start next Monday and that the European Union is ready to hold several negotiating sessions with Britain, explaining that these negotiations will be complicated, especially among the many outstanding issues. And adding that the European Union will not end these negotiations under any circumstances.

It is reported that French President Emmanuel Macron expressed at the beginning of this week the chances of reaching a trade agreement with Britain by the end of the year, pointing out that negotiations on fishing areas with Britain may be very complicated, adding that British Prime Minister Boris Johnson is very difficult in negotiations with The European Union is trying to get the advantages of accessing European markets, which increases the uncertainty about reaching a trade agreement.

In another context, French Finance Minister Bruno Lemerre also mentioned Monday that the Corona virus had a negative impact on the tourism sector in his country, explaining that the number of tourists decreased between 30% to 40% as a result of the spread of the coronavirus, with his statement that this decline will be It has a negative impact on the French economy, the second largest economy in the eurozone, especially that France hosts 2.7 million Chinese visitors annually, and that this figure is expected to drop significantly this year.

Looking at Italy, the third largest economy in the eurozone, which is most affected by the Corona virus outside Asia, it announced yesterday more than 200 new cases of the virus, and this came after its cancellation during last weekend of some public events, including the Venice Festival, due to the high number of people infected with the virus The killer, and also at the weekend Austria stopped a train arriving from Italy due to the suspicion that two of his passengers were infected with the virus.

On the other hand, investors are currently looking for what will be revealed by the talk of a member of the Federal Open Market Committee and Chairman of the Dallas Federal Reserve Bank Robert Kaplan at a conference of emerging director in Austin, before we witness the disclosure of the US housing market data from the release of the New Home Sales Index, which may explain An increase of 2.7% to about 713 thousand houses compared to a decline of 0.4% at about 694 thousand homes last December.

Technical analysis

The euro against the dollar presented positive trades yesterday, noting that the rise was stopped at the level of the 23.6% Fibonacci retracement of the last measured decrease from 1.1239 to 1.0778, as the price starts to bounce down from there, on its way to test the support of the bullish intraday channel that appears in the picture, Which we believe constitutes a bearish continuation flag pattern that supports the chances of resuming the main bearish trend again.

The stochastic is providing negative signals on the four hour time frame, waiting for the contribution to pay to break 1.0840 which represents the support of the aforementioned pattern to activate the negative effect of this pattern and then rush towards our negative targets that start at 1.0760 and extend to 1.0680.

Thus, we continue to favor the overall bearish trend, keeping in mind that a breach of 1.0887 will stop the expected decline and lead the price to make a further bullish intraday correction, whose next target is located at 1.0954.

The expected trading range for today is between 1.0780 support and 1.0920 resistance.

Expected trend for today: bearish.