EUR analysis 20.03.2020

The single currency, the euro, rose during the Asian session to witness its rebound from the lowest since 21 April 2017 against the US dollar on the threshold of developments and economic data expected today by the economies of the euro area and the US economy, the largest economy in the world and in the shadow of the growing fears of the spread of the global epidemic of the Corona virus Investors' assessment of global stimulus to meet the corona's dependents on the global economy.

At exactly 05:08 AM GMT, the euro pair rose against the US dollar by 0.69% to 1.0766 levels compared to the opening levels at 1.0691 after the pair achieved its highest level during the trading session at 1.0769, while achieving the lowest in three years at 1.0653.

Investors are looking forward to the largest euro area economies, Germany, to disclose inflation data with the release of the producer price index, which is an initial indication of inflationary pressures, which may show a 0.2% contraction against a growth of 0.8% last January, while the annual reading of the same index may clarify Growth stability at 0.2%, and that comes before we witness about the eurozone economies as a whole the seasonally adjusted reading of the current account index that may reflect the contraction of the surplus to 30.3 billion euros compared to 32.6 billion euros last December.

This comes hours after the European Central Bank announced on Wednesday an epidemic emergency program to buy securities and help support the economies of the euro area 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 anticipating the US economy to disclose housing market data with the release of the existing home sales index, which may show a 0.9% increase to 5.50 million homes compared to a 1.3% decline at 5.46 million homes in January, otherwise we followed yesterday US President Donald Trump announced yesterday that the FDA is testing a drug to treat malaria in treating the Corona virus, adding that initial results are promising.

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 in the wake of the surprising meeting held by the Federal Reserve last Sunday, which is the second surprising meeting in less than two weeks after the previous surprising meeting in the third of this month in which the Federal Reserve monetary policy makers decided to return the short-term benchmark interest rates to levels. The zero 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.

Technical analysis

The euro against the dollar presented strong negative trading yesterday and reached 1.0650 areas, noting that the price starts the day with an upward tendency in a sign to start an expected bullish correction in the intraday and short term, as the bearish channel support that appears in the image coherent against the last negative pressure, which makes us likely To see positive trades during the upcoming sessions.

Thus, the bullish bias will be expected for today unless the 1.0655 level is broken and stability below it, noting that the expected positive targets start at 1.0855 and extend to 1.0980 after exceeding the previous level.

The expected trading range for today is between 1.0650 support and 1.0855 resistance.

Expected trend for today: bullish.