EUR analysis 27.02.2020

The single currency, the euro, rose during the Asian session to witness its resumption from its lowest since the second half of April 2017 for the fourth session in six sessions against the US dollar on the cusp of developments and economic data expected today Thursday by the economies of the euro area and the US economy, which includes the dumping of a member of the Federal Committee Open Market and President of the Cleveland Bank of the Federal Reserve Loretta Mester the opening speech at the symposium "Women in the Economy" in Cleveland.

At exactly 05:34 AM GMT, the pair rose the euro against the US dollar by 0.26% to 1.0909 levels compared to the opening levels at 1.0881 after the pair achieved its highest level since February 12 at 1.0915, while achieving the lowest during the trading session At 1.0878.

Investors may be looking by Spain, the fourth largest economy in the eurozone, to disclose inflation data with the release of the annual reading of the consumer price index, which may reflect a slowdown in the pace of growth to 0.8% compared to 1.1% in the previous annual reading last December, and that comes before it We are witnessing the economies of the euro area as a whole, the release of the annual reading of the index of private loans, which may explain the stability of growth at 3.7% during January.

This comes in conjunction with the disclosure of the annual reading of the M3 money supply also for the economies of the euro area, which may explain the acceleration of growth to 5.3% compared to 5.0% in the previous annual reading for the month of December. Otherwise, we followed yesterday the chief European Union negotiator expressed to the file Britain's exit from the European Union Michel Barnier from the fact that the trade negotiations between the European Union and Britain may be complicated due to the limited time available to reach a trade agreement.

In another context, we also followed yesterday, the European Central Bank Governor Christine Lagarde expressed the importance of the level of confidence in the euro area and that the European Central will communicate with citizens of the European Union during its strategic review, while welcoming German plans to reduce public debt, explaining that the European Central welcomes any Measures taken by Germany to support the largest economies of the eurozone in the current period.

This came in the wake of the report that touched on the fact that the German government plans to suspend the decision to curb debt and allow local governments to obtain the necessary funds for a temporary period in efforts to support the German economy. In another context, European Commissioner Paolo Gentiloni noted yesterday that it is too early to assess the implications of the Corona virus On the economies of the euro area, with his statement that European financial rules include allowing spending in emergency situations.

On the other hand, investors are currently awaiting by the US economy the disclosure of the second reading of GDP, which may reflect the widening of the largest economy in the world 2.1% during the fourth quarter, little changed from the previous first reading, as the second reading of GDP measured by prices may show stability Growth at 1.4% was also little changed from what it was in the previous preliminary reading of the previous quarter.

This comes in conjunction with the disclosure of the reading of the durable goods orders index, which represents about half of consumer spending, which represents more than two-thirds of the gross domestic product in the United States, which may reflect a 1.5% decline compared to a rise of 2.4% in December, while a substantial reading may appear The same index rose 0.2%, compared to a decline of 0.1% in December.

This is also in conjunction with the issuance of the index of subsidy requests for the past week on February 15th, which may reflect an increase by one thousand requests to 211 thousand requests compared to 210 thousand requests in the previous weekly reading, up to the disclosure of housing market data with the release of home sales reading The list, which may show a rise of 2.8% compared to a decline of 4.9% in December.

Otherwise, yesterday we followed US President Donald Trump's attempt to allay investor fears of the spread of the Corona virus at a press conference, in conjunction with the US Centers for Disease Control and Prevention reported that she had identified a patient with the virus who had not traveled to China and was not exposed to another known case of HIV infection, It is reported that the chief health official in the United States warned Tuesday of the possibility of spreading the virus in his country and that the virus could become a global epidemic.

Technical analysis

Despite the daily closing that was achieved below 1.0887, the euro against the dollar pair starts today with a new bullish tendency to breach this level and settle above it, which provides signs of the continuous price attempts to make further bullish correction, supported by the positivity of stochastic.

Now, we prefer stopping on the neutral until the price confirms its position regarding the above mentioned level, noting that stability above it will lead the price to achieve additional positive goals that start at 1.0954 and may extend to 1.1008, while trading below 1.0887 again will reactivate the main downside scenario that exists Its next targets are at 1.0760 then 1.0680.

The expected trading range for today is between 1.0830 support and 1.0985 resistance.

Expected trend for today: neutral.