EUR analysis 24.03.2020

The single currency, the euro, rose during the Asian session to witness its bounce for the second consecutive session from the lowest since April 21, 2017 against the US dollar on the threshold of developments and economic data expected today by the euro area economies and the US economy, the largest economy in the world and with investors' assessment of stimulus in the face of The repercussions of the spread of the Corona Virus globally and the announcement by China to lift the ban on the city of Wuhan to combat Corona by April 8.

At 05:45 am GMT, the euro pair rose against the US dollar by 0.51% to 1.0781 levels compared to the opening levels at 1.0725 after the pair achieved its highest level during the trading session at 1.0823, while achieving the lowest at 1.0726.

The markets are currently awaiting for the French economy, the second largest economy in the euro area, and the German economy, the largest economy in the euro area, in addition to the economies of the region as a whole. To the economies of the region as a whole.

On the other hand, investors are awaiting the disclosure of the initial reading of the Markit manufacturing and services PMI for the United States, which may reflect the contraction of the industrial sector in the largest industrial country in the world to a value of 45.1 compared to a expansion of 50.7 in the previous reading for the month of February, while it may We are witnessing the expansion of the service sector to 44.1 compared to 49.4 in February.

This comes before we also witnessed by the US economy the disclosure of the Richmond Industrial Index reading that may reflect the widening contraction to 10 versus 2 in February, up to the disclosure of housing market data from the release of the New Home Sales Index, which may indicate a decline 1.8% to about 750 thousand homes compared to a rise of 1.8% at about 764 thousand homes in January.

Other than that, we followed yesterday the Federal Reserve announced a new stimulus package to support the economy from the repercussions of the Corona virus, and the Federal Reserve statement stated that it is committed to using a set of tools to support the economy in this difficult period and thus enhance employment and price stability, explaining that the Federal Open Market Committee has gone ahead Go ahead and closely monitor market conditions and evaluate the appropriate pace of securities purchases at future meetings.

The Fed’s statement also stated that the Federal Committee decided, as of Monday, March 23, that the bank would commit to conducting open market operations according to need, in addition to establishing a new loan program to support students, and that a loan program to support small and medium-sized companies would be announced soon, and we would like to point out that These measures by the Federal Reserve are unprecedented, as it does not place any restrictions on the assets that have been announced to be purchased as necessary.

This comes in the wake of the surprising meeting of the Federal Reserve on the 16th of March, which is the second surprising meeting in less than two weeks, after the previous surprising meeting on the third of this month in which the monetary policy makers of the Federal Reserve decided to return at the benchmark interest rates. Short-term to 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 at the time by 100 basis points to between zero levels and 0.25%, which it remained in since 2008 until the meeting of 27-28 October 2015, after reducing it in the previous emergency meeting by 50 A base point is between 1.00% and 1.25%, and this comes after the committee members cut interest three times by 25 basis points in previous meetings last year.

Technical analysis

The euro against the dollar pair opens today's trading with a bullish tendency to exceed our first target 1.0777 and approach the second at 1.0840, reinforcing the chances of making a further bullish correction on the intraday basis, noting that the breach of the last level will push the price to 1.0966, which represents the Fibonacci level of 38.2% for the decline that It was measured from 1.1498 to 1.0637.

Thus, we expect the bullish bias to continue during the upcoming sessions, taking into consideration that failure to breach 1.0840 will put the price under negative pressure again, heading towards 1.0637 areas initially.

The expected trading range for today is between 1.0700 support and 1.0900 resistance.

Expected trend for today: bullish.