EUR analysis 06.03.2020

The euro currency fluctuated in a narrow range tilted towards the decline during the Asian session to witness its rebound from above since August 6, 2019 against the US dollar after the members of the Federal Open Market Committee talk and on the cusp of developments and economic data expected on Friday by the economies of the euro area and the American economy That includes the talk of another member of the Federal Open Market Committee.

At exactly 05:34 am GMT, the euro against the US dollar fell 0.01% to 1.1236 levels compared to the opening levels at 1.1238 after the pair achieved its lowest level during the trading session at 1.1212, while achieving the highest in seven months at 1.1249.

Markets are looking by Germany, the euro zone’s largest economy, for the release of factory orders reading, which may show a 1.5% rise versus a 2.1% decline in last December, while an annual seasonally adjusted reading may reflect a shrinking decline to 5.4% versus 8.7%, before To witness by France, the second economy in the region, the reading of the trade balance showed that the deficit widened to 4.9 billion euros, compared to 4.1 billion euros in December.

This comes before we witnessed by Italy, the region's third largest economy, that the retail sales reading showed that growth slowed to 0.3% compared to 0.5% in December. Otherwise, we followed yesterday. European Union Trade Commissioner Phil Hogan said that the trade talks What happened between Brussels and Washington has been constructive so far, while the chief commissioner of the European Union, Michel Barnier, also noted yesterday that both the European Union and Britain are able to reach a good agreement despite the very difficult differences between the two sides.

On the other hand, we have just followed the talk of members of the Federal Open Market Committee, President of the Minneapolis Federal Reserve Bank Neil Kashkari, who participated in a panel discussion at the University of Minnesota in St. Paul, and the talk of New York Federal Reserve Chairman John Williams about monetary policy and economics at the services dinner. Finance for the New York Foreign Policy Association.

This came amid markets' aspiration to reveal the US labor market data for the past month, which may reflect the stability of unemployment rates at 3.6%, little changed from what they were in January, with a reading of the employment change index for sectors other than agriculture showed a slowdown in the pace of job creation To 175 thousand jobs compared to 225 thousand jobs in January, while reading the hourly average income index may show that growth accelerated to 0.3% compared to 0.2%.

This comes in conjunction with the release of the trade balance reading, which may reflect the narrowing of the deficit to $ 46.3 billion compared to $ 48.9 billion in December, and before the disclosure of the final reading of the wholesale inventory index, which may explain the stability of the decline at 0.2%, up to the participation of Williams along with a member Another on the Federal Reserve is Boston Fed President Eric Rosengren at a panel discussion titled "Monetary Policy and Lower Zero" in New York.

It is noteworthy that the Federal Reserve held a surprising meeting last Tuesday through which the 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 fixing them 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 up on 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 and improved The labor market and that the committee has repeatedly stressed that the current monetary policy is appropriate.

Technical analysis

The euro against the dollar succeeded in touching our awaited target at 1.1240 and attempts are being made to breach it, so that the bullish wave is likely to extend in the short term, as our next target is at 1.1418.

SMA 50 supports the expected rise, and the price may witness a temporary negative fluctuation due to the negative effect of stochastic indicator before resuming the suggested bullish trend, noting that a break of 1.1137 will stop the expected rise and press the price to start a bearish correction in the intraday basis.

The expected trading range for today is between 1.1140 support and 1.1330 resistance.

Expected trend for today: bullish.