EUR analysis 03.03.2020

The euro currency fluctuated in a narrow range tilted to the upside during the Asian session to witness its rebound to the seventh session in nine sessions from the lowest since mid-April 2017 against the US dollar on the threshold of developments and economic data expected by the euro area economies and amid the scarcity of economic data on Tuesday from Before the American economy the largest economy in the world.

At exactly 05:34 am GMT, the euro pair rose against the US dollar by 0.11% to 1.1046 levels compared to the opening levels at 1.1134 after the pair achieved its highest level during the trading session at 1.1156, while it achieved the lowest at 1.1120.

The markets are looking forward to the issuance of the treasury budget reading for France, the second largest economy in the euro area, before we witness by Spain, the fourth largest economy in the region, the release of the unemployment change index, which may reflect an increase of 8.2 thousand compared to a rise of 90.2 thousand in January, and before the reading Italy's unemployment rate index, the region's third largest economy, may show its stability at 9.8% in January.

This comes before we witness about the economies of the region as a whole the disclosure of inflation data with the release of the preliminary annual reading of the consumer price index, which may reflect the stability of the pace of growth at 1.4% during February, while the initial substantive annual reading of the same indicator may show the acceleration of the pace of growth to 1.2% Compared to 1.1% in the previous annual reading for January.

It also comes in conjunction with the disclosure of other inflation data for the economies of the region as a whole with the release of the producer price index, which is an initial indication of inflationary pressures, which may show 0.5% growth against stability at zero levels last December, while the annual reading of the index may show By the same token, the contraction shrank to 0.4% from 0.7%, with the unemployment rate reading for the region as a whole also showing stability at 7.4% during January.

On the other hand, investors are currently looking forward to the talk of Federal Open Market Committee member and President of the Federal Reserve Cleveland Bank Loretta Mester about the economic outlook and monetary policy at the annual dinner of the Society of Professional Economists in London, and this comes hours after the US President criticized the Fed’s position and the political situation The current criticism, expressing the delay of the Fed and his Powell Governor in taking decisions.

U.S. President Trump, through his Twitter account via his official account on Twitter, also expressed that Germany and a number of countries are pumping money to support their economy, and that the major central banks in other countries are more strict in making decisions, adding that due to many reasons the United States should have The lowest rate of interest, explaining that this was not done by the Federal Reserve and his Powell Governor.

Markets are currently pricing the Federal Reserve to resume cutting interest on federal funds this year and reducing them by 50 basis points to between 1.00% and 1.25% at the March 17-18 meeting, and after cutting them three times by 25 basis points last year To 1.50% and 1.75%, and looking forward also to the Federal Committee revealing its expectations for the future of interest rates and the rate of growth, inflation and unemployment for the next three years.

Technical analysis

The euro against the dollar pair achieved a strong rise yesterday to reach the main downside channel resistance, and we note that the price is making attempts to breach it, which supports the chances of achieving more expected gains during the coming period, and we believe that the path is open to achieving our next target which is located at 1.1240.

Consequently, the bullish trend will remain dominant in the intraday and short term, noting that breaching the target level will push the price to 1.1418 as the next station, while the suggested rise will remain valid on condition of stability above 1.1085.

The expected trading range for today is between 1.1085 support and 1.1240 resistance.

Expected trend for today: bullish.