EUR analysis 19.03.2020

The single currency fluctuated the euro in a narrow range slanting back down during the Asian session to witness its rebound to the seventh session in nine sessions from its highest since late January 2019 against the US dollar amid the scarcity of economic data by the economies of the euro area and on the eve of developments and economic data expected on Thursday By the US economy, the largest economy in the world, and in light of the growing fears of a global outbreak of the Corona virus.

At 05:26 am GMT, the euro against the US dollar fell 0.15% to 1.0899 levels compared to the opening levels at 1.0915, after the pair achieved its lowest level during the trading session at 1.0878, while achieving the highest at 1.0981.

On Wednesday, we followed up on the European Central Bank announcing an epidemic emergency program to buy securities and help support the economies of the eurozone at a value of 750 billion euros ($ 821 billion), stressing that "it will ensure that all sectors of the economy can benefit from the supportive financing conditions that enable them to absorb This shock "and that" it applies equally to families, companies, banks and governments and that he will do whatever is necessary within the limits of his mandate. "

On the other hand, investors are currently looking to the US economy for the disclosure of industrial sector data with the release of the Philadelphia Industrial Index reading, which may reflect a shrinkage in the expansion of what amounted to 9.5 compared to 36.7 last February, and this comes in conjunction with the release of the aid claims index for the past week On March 14th, which may reflect an increase of 9 thousand requests to 220 thousand requests compared to 211 thousand requests in the previous weekly reading.

This also comes in conjunction with the issuance of the reading of the ongoing subsidy requests for the last week on the seventh of this month, which may reflect an increase of 13 thousand requests to 1,735 thousand applications compared to 1,722 thousand requests, up to the issuance of the reading of the current account, which may reflect the shrinking of the deficit to the value of 109 $ 1 billion versus $ 124 billion in the past third quarter, and with the reading of leading indicators showing growth slowed to 0.1% from 0.8% in January.

This comes hours after the Federal Reserve announced that it will enter the commercial paper markets, which have been frozen in the midst of the economic turmoil, threatening businesses that need financing between today and the other, and the Federal Open Market Committee stated on Tuesday that it will establish a financing facilitation committee for commercial papers to support the cash flow of homes and businesses and that it has formed A special purpose vehicle for purchasing any securities of unsecured assets with $ 10 billion in support from the Treasury.

This came hours after the Federal Reserve’s surprising meeting last Sunday, which is the second surprising meeting in less than two weeks, after the previous sudden meeting on the third of this month in which the Federal Reserve’s monetary policy makers decided to return to the short-term benchmark interest rates. Zero levels reached in the wake of the worsening global financial crisis more than a decade ago.

The members of the Federal Open Market Committee reduced the interest on federal funds by 100 basis points to between zero levels and 0.25%, which they remained from 2008 until the meeting of 27-28 October 2015, after reducing them in the previous emergency meeting by 50 points. The basis is between 1.00% and 1.25%, and this comes in the wake of the committee members cutting interest three times by 25 basis points in previous meetings last year.

The Federal Reserve monetary policy statement stated that the decision to reduce will be effective from Monday March 16, and that the Federal Open Market Committee will carry out repurchases of treasury bonds at a minimum of $ 500 billion per month and mortgage-backed securities at $ 200 billion per month At least, these purchases should be made at the appropriate speed to support the smooth performance of the stock market, treasury and mortgage agency.

Technical analysis

The EURUSD pair presented noticeable negative trades yesterday to succeed in reaching the outskirts of the main target 1.0778, and as we indicated in our recent update, we expect the bearish bias to continue during the upcoming sessions, noting that breaking the mentioned level will extend the downside wave to reach 1.0600 as the next station.

Therefore, the negative pressure will remain valid in the short and medium term, considering that the consolidation of 1.0778 level against the current negative pressure will lead the price to start new recovery attempts targeting testing 1.0950 then 1.1115 initially.

The expected trading range for today is between 1.0770 support and 1.1000 resistance.

Expected trend for today: bearish.