EURUSD analysis 02.04.2020

The single currency fluctuated the euro in a narrow range slanting back down during the Asian session to witness its bounce to the fifth session from the top since March 17 against the US dollar on the threshold of developments and economic data expected Thursday by the economies of the euro area and the US economy the largest economy in the world.

At exactly 04:40 am GMT, the euro against the US dollar fell 0.26% to 1.0936 levels compared to the opening levels at 1.0964 after the pair achieved its lowest level during the trading session at 1.0930, while achieving the highest at 1.0968.

The markets are looking to Spain, the region’s fourth largest economy, to publish a reading of the unemployment change index, which may show a rise of 27.7 thousand, compared to a decline of 7.8 thousand last February. This comes before we witness about the economies of the region as a whole the disclosure of the PPI reading, which is an indicator In principle, inflationary pressures may reflect a 0.2% contraction versus a 0.4% growth last January, while the annual reading of the same indicator may show the contraction widening to 0.8% compared to 0.5% in the previous annual reading for January.

On the other hand, investors are currently awaiting by the US economy the release of the index of subsidy requests for the last week on March 28, which may reflect an increase of 217 thousand requests to 3,500 thousand applications compared to 3,283 thousand requests in the previous weekly reading, and this comes in conjunction with the issuance The merchandise trade balance index reading, which may explain the deficit narrowing to $ 40.6 billion compared to $ 45.3 billion last February, and with the initial reading of the wholesale inventory index showing a 0.2% increase compared to a 0.5% decline in February.

Technical analysis

The euro against the dollar ended yesterday's trading below the level of 1.0966, and confirmed the completion of the formation of the head and shoulders pattern that appears in the above chart, where he conducted a retest of the broken neckline and maintains its stability below him, so that the negative impact of this model remains effective, waiting for the trend towards 1.0840 as a negative target first.

Therefore, we will continue to favor the bearish trend during the upcoming sessions, noting that breaching the mentioned level will extend the descending wave to reach 1.0700 then 1.0640 as the next main stations, while the expected decline will remain effective unless the price is able to breach the 1.0966 level and hold above it.

The expected trading range for today is between 1.0800 support and 1.1000 resistance.