EUR analysis 12.03.2020

The single currency fluctuated the euro in a narrow range slanting up during the Asian session against the US dollar on the threshold of economic developments and data expected on Thursday by the economies of the euro area and the US economy, the largest economy in the world, which includes the decisions and directions of monetary policy makers at the European Central Bank and the press conference of the central European Christine Lagarde In the wake of US President Donald Trump's speech, which failed to calm investor fears after the World Health Organization declared the Corona virus a global pandemic.

At 05:59 am GMT, the euro pair rose against the US dollar by 0.20% to 1.1292 levels compared to the opening levels at 1.1270 after the pair achieved its highest level during the trading session at 1.1333, while achieving the lowest at 1.1251.

Markets are looking for the third largest economy in the region, Italy. The reading of the unemployment rate index, which may reflect stability at 9.8% during the fourth quarter, before we witness the economies of the euro area as a whole reveal the seasonally adjusted reading of the industrial production index, which may reflect a 1.4% rise against a decline 2.1% last December, while the annual reading of the same index may show a decline in the decline to 3.1% compared to 4.1%.

Up to the ECB meeting, during which the monetary policy makers of the European Central Bank are expected to decide to maintain interest rates at their current zero levels and to fix the marginal lending rate at 0.25% in addition to staying on the interest rate on negative deposits -0.50% and move forward in The quantitative easing program at 20 billion euros per month, as long as necessary.

Markets are looking to later in the day for the press conference of the European Central Bank Governor Christine Lagarde amid expectations that the European Central will expand stimulus, especially after the recent statements that it may move as soon as possible, and this comes hours after the Bank of England cut interest rates by 50 basis points to catch all From the Federal Reserve, the Bank of Canada, and the Reserve Bank of Australia.

According to Bloomberg, the European Central Bank’s governorate warned Lagarde yesterday of the possibility of Europe facing a crisis similar to the global economic crisis in 2008, as it called on decision-makers to act quickly to avoid the repercussions of the outbreak of the Corona virus, and this came hours after the European Commission President Ursula Von announced Line last Tuesday, the European Union intends to inject a 25 billion euro financing package to counter the consequences of the Corona virus.

It is noteworthy that German Chancellor Angela Merkel pledged yesterday to do "everything necessary" to boost the economy of Germany, the largest economy in the euro area, and this came after Italian Prime Minister Giuseppe Conte reported that a stimulus plan of about 25 billion euros had been put in place to support his country's economy in the face of the repercussions of the virus Coruna, this came after his government announced earlier this week to expand quarantine to include the country as a whole because it contained the virus.

On the other hand, investors are currently awaiting by the US economy the disclosure of the producer price index reading, which is an initial indicator of inflation, which may reflect a 0.1% contraction versus 0.5% growth last January, while a substantial reading of the same indicator may show a slowdown in growth to 0.1 % Versus 0.5%, and the annual reading of the same indicator may show a slowdown in growth to 1.8% versus 2.1%, while the substantial annual reading of the index may reflect stability at 1.7%.

This also comes in conjunction with the issuance of the index of subsidy requests for the last week on the seventh of this month, which may show an increase by two thousand requests to 218 thousand applications compared to 216 thousand requests in the previous weekly reading, as may read the reading of the index of subsidy requests continued for the last week on 29 of Last February, an increase of 4 thousand requests to 1,733 thousand requests compared to 1,729 thousand requests in the previous weekly reading.

Other than that, we have just followed the press conference held by US President Donald Trump, during which he announced the suspension of all travel to Europe and a number of incentive measures, which included urging Congress to agree to an unspecified procedure for salary tax exemptions, expressing his confidence that America will limit One of the dangers it might pose, but his speech did not give investors the confidence that the United States is tightening its grip on the virus.

In another context, we followed yesterday, US Secretary of Finance Stephen Manuchin expressed during his testimony about the budget proposed by the Trump administration for the fiscal year 2021/2022 before the Subcommittee on Foreign Operations and Related Programs in Washington, that public health is the highest priority for the US government In this budget, with reference to it being approved by Congress to allocate $ 8 billion to fight against Corona.

The US Secretary of Finance Manuchin also stated that the International Monetary Fund and the World Bank are committed to providing adequate financial support to tackle the Corona virus, while expressing the fact that the US government aims to provide liquidity and direct financing to small and medium-sized projects and that the fiscal stimulus package will coincide with the reduction of salary taxes, indicating that it will be pumped Hundreds of billions of dollars in the American economy coinciding with tax cuts.

It is reported that the World Health Organization announced yesterday that the Coruna virus is a global epidemic, and we have also followed up on the statements of the Director-General of the World Health Organization, Tedros Adhanum Ghebrysos, "We are very concerned about the spread, hidden danger, and worrying levels of inaction," adding, "We rang the alarm loudly and clearly." According to the most recent figures issued by the organization, the number of cases infected with the virus has increased to more than 118 thousand, and 4,292 people have died in 114 countries.

Technical analysis

The euro against the dollar pair approached the level of 1.1221 yesterday, and returned to volatility near 1.1325, noting that the stochastic indicator continues to provide negative signals that support the chances of the continuation of the downward corrective pressure during the upcoming sessions, so that we continue to favor the bearish trend over the intraday basis, taking note that it exceeded 1.1221 It will extend the descending wave to reach 1.1136.

Stability below 1.1325 keeps the corrective scenario effective, as breaching it will lead the price to restore the main bullish trend that its first target is at 1.1457.

The expected trading range for today is between 1.1200 support and 1.1360 resistance.

Expected trend for today: bearish temporarily.