EUR analysis 04.03.2020

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 January 2 against the US dollar on the cusp of developments and economic data expected today Wednesday by the economies of the euro area and the US economy the largest economy in the world .

At 05:18 am GMT, the euro pair rose against the US dollar by 0.10% to 1.1162 levels compared to the opening levels at 1.1173 after the pair achieved its lowest level during the trading session at 1.1155, while it achieved the highest at 1.1185.

Currently, Spain is looking to Spain, the fourth largest economy in the eurozone, to disclose the Services PMI reading, which may show a widening to 52.5 compared to 52.3 in January, before we see the same indicator reading for Italy, the third largest economy in the region, which may Reflects stability of the expansion at its value of 51.4 during February.

Investors are also looking for France, the second largest economy in the eurozone, to disclose the final reading of the services PMI, which may show the stability of expansion at 52.6 unchanged from the initial reading for the past month and 51.0 in the previous reading in January, before the final reading of the index Same for Germany, the region's largest economy, which may also explain the expansion of the expansion at 53.3, compared to 54.2 in January.

Up to reveal the final reading of the services PMI for the euro area as a whole, which may show the stability of the expansion at 52.8 unchanged from the initial reading for the previous month of February, and against 52.5 in January, as we may also witness about the economies of the euro area as a whole issued a sales index reading Retail of the euro area as a whole, which may explain a rise of 0.6% against a decline of 1.6% last December.

Other than that, yesterday we followed the report that touched on the fact that the European Central Bank officials expressed that the European Central is ready to take appropriate measures when necessary and that they monitor developments related to the spread of the Corona virus, which would create risks to economic expectations and financial market conditions, in order to assess those Developments and their impact on both the euro area economies and the medium-term inflation target.

On the other hand, investors are looking for the US economy to disclose preliminary data for the labor market with the release of the index of change in private sector jobs, which may reflect a slowdown in the pace of job creation to 170 thousand added jobs compared to 291 thousand added jobs last January, before Hours of disclosure of the monthly report of jobs except agricultural and unemployment rates in addition to the hourly rate for the month of February after tomorrow, Friday.

This comes before we witness the issuance of the final reading of the Service Supply Institute index by Marquette about the United States, which may reflect the stability of the contraction at 49.4 unchanged from the initial reading of last month and against a widening at 53.4 in January, and before revealing the reading of the Institute's index Service supply, which may show a shrinkage in capacity to 54.9, compared to 55.5 in January.

We would like to point out that the importance of service provision lies in the fact that the service sector in America represents more than two-thirds of the gross domestic product, and finally the market is looking to unveil the Big Book, whose importance lies in the fact that it is issued two weeks before the meeting of the Federal Open Market Committee, which is scheduled to be held on 17-18 March is expected to reveal the Committee's expectations for the future of interest rates and the rate of growth, inflation and unemployment for the next three years.

This comes hours after the sudden meeting of the Federal Reserve yesterday, during which members of the Federal Open Market Committee decided to reduce the interest on federal funds by 50 basis points to between 1.00% and 1.25% after being installed in the previous two meetings of the Federal Reserve at between 1.50% And 1.75%, and after reducing it three times by 25 basis points in previous meetings last year.

In the same vein, we also followed yesterday, Tuesday, the press conference held by Federal Reserve Governor Jerome Powell after the decision to suddenly reduce markets to short-term benchmark interest rates, through which he noted that the decision came to support the American economy, while touching that over the past years wages increased The labor market has improved and the Committee has repeatedly stressed that the current monetary policy is appropriate.

Powell also expressed yesterday that several risks have arisen and the current situation has become in a state of uncertainty, which made the Federal Committee see the existence of fundamental changes that prompted it to take a reaction, adding that over the next months and weeks the committee will work to monitor markets and developments and take appropriate decisions to support the economy, He explained that the American economy is strong, but it is difficult to determine the extent of the negative effects of the spread of the Corona virus locally and globally.

Powell stressed during the press conference that the committee’s decision to cut interest at Tariq’s meeting for the first time since the global financial crisis that occurred more than a decade ago and by 50 basis points, which is rarely made by the Federal Reserve, is not a political decision but rather stems from a vision The Federal Committee for Current Events, and this came in the wake of US President Donald Trump's call repeatedly for the Federal Reserve and Powell County to cut interest and expand stimulus.

Technical analysis

The EURUSD pair confirmed the breach of the descending channel's resistance after closing the daily candle above it, which supports the continuation of the bullish trend scenario on the intraday and short term, whose targets begin by testing the 1.1240 level, noting that breaching this level will push the price to 1.1418 as the next main station.

It should be noted that consolidation above 1.1140 is important for the expected continuation of the upside, as breaking it will press the price to start a bearish corrective wave over the intraday basis, aiming to test 1.1045 areas initially before any new attempt to rise.

The expected trading range for today is between 1.1100 support and 1.1250 resistance.

Expected trend for today: bullish.