EUR analysis 18.03.2020

The single currency fluctuated the euro in a narrow range slanting up during the Asian session to witness its bounce for the second session from its top since late February 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 amid growing Fears of a global outbreak of the Corona virus.

At 04:51 am GMT, the euro pair rose against the US dollar by 0.27% to 1.1027 levels compared to the opening levels at 1.0997, after the pair achieved its highest level during the trading session at 1.1033, while achieving the lowest at 1.0985.

Markets are currently awaited by the economies of the euro area as a whole. Disclosure of inflation data with the release of the annual final reading of the consumer price index, which may reflect the stability of growth at 1.2%, little changed from the initial reading for February and 1.4% in the previous reading of January Last January, as the substantial annual reading of the same indicator may show, stability has grown at 1.2%, also without significant change from the initial reading and against 1.1%.

This comes in conjunction with the release of the trade balance reading for Italy, the third largest economy in the euro area, which may explain the shrinking surplus to 4.23 billion euros against 5.01 billion euros in December, and showed a seasonally adjusted reading of the trade balance for the euro area as a whole reduced the surplus to 19.3 billion euros against 22.2 One billion euros, otherwise, we continued yesterday, French Finance Minister Bruno Lemerre announced his country's intention to pump a 50 billion euro financing package to counter the consequences of the Corona virus, pointing out that this package aims to help small companies and employees who will be affected by the spread of Corona.

On the other hand, investors are currently waiting for the US economy to disclose housing market data with the release of each of the beginning housing index and building permit index and amid expectations that the reading of building permits reflect a 3.2% decline to 1,500 thousand permits compared to a rise of 9.2% at 1,551 thousand permits In January, the readings for homes that were built may also reflect a 4.3% decline to about 1,507 thousand homes, compared to a rise of 16.9% at 1,567 thousand homes.

Otherwise, yesterday we followed the report that touched on the fact that the volume of incentives planned by the administration of the forty-fifth US President Donald Trump might reach $ 1.2 trillion to avoid the worst impact of a crisis that already seems to be flooding many global economies in a recession, and yesterday we followed the announcement of a bank The Federal Reserve reported additional tools in efforts to stabilize financial markets.

In the same context, US Treasury Secretary Stephen Mnuchen warned that the Corona virus could lead to an increase in unemployment rates in his country to 20% in the event that the US government does not interfere, with his announcement of a three-month delay in paying taxes in America and that the US administration is working to send aid to those affected. , Adding that the fact that aid would be approved as part of efforts to counter the negative effects of the Corona outbreak may exceed what was announced in the newspapers.

This comes, hours after the sudden meeting of the Federal Reserve last Sunday, during which members of the Federal Open Market Committee decided to cut interest rates by 100 basis points to between zero levels and 0.25%, after less than two weeks from another sudden meeting The Federal Reserve was able to reduce interest by 50 basis points at the time, and quantitative easing plans and bond purchases of $ 700 billion a month were announced.

Technical analysis

The EURUSD pair confirmed a break of the 1.1050 level after the daily candle closed below it, and is re-testing this level after touching our first target at 1.0950 yesterday, waiting for the resumption of negative trades to break the mentioned level and opening the way for heading towards our extended target that reaches 1.0778.

Consequently, we will continue to favor the bearish trend for the upcoming period supported by moving below SMA 50, noting that breaching 1.1050 then 1.1136 will stop the expected decline and lead the price to start new recovery attempts.

The expected trading range for today is between 1.0930 support and 1.1100 resistance.

Expected trend for today: bearish.