EURUSD analysis 03.04.2020

The single currency fluctuated the euro in a narrow range slanting back down during the Asian session to witness its bounce for the sixth session from the top since March 17, and to promise to resume its weekly losses that stopped last week for the first time in three weeks against the US dollar on the cusp of developments and economic data expected today Friday by the economies of the euro area and the US economy, the largest economy in the world.

At 05:42 am GMT, the euro against the US dollar fell 0.08% to 1.0849 levels compared to the opening levels at 1.0858 after the pair achieved its lowest level during the trading session at 1.0833, while achieving the highest at 1.0864.

The markets are looking to release the treasury budget reading for France, the second largest economy in the euro area, before we witness by Spain, the fourth largest economy in the region, to reveal the reading of the services PMI, which may show a contraction of 25.6 compared to a expansion of 52.1 in February, before To see the same index reading for Italy, the region's third largest economy, which may also reflect a contraction to 22.4 versus a widening of 52.1.

Investors are also looking for France to disclose the final reading of the Services PMI, which may show the contraction stable at 29.0 unchanged from the initial reading for the past month and against a widening at 52.5 in the previous reading for February, before the final reading of the same index for Germany, the largest economy The area which might explain the contraction widened to 34.3 compared to the previous reading at 34.5, versus the breadth at 52.5.

To reveal the final reading of the services PMI for the euro area as a whole, which may show the widening of the contraction to 28.2 compared to the contraction of 28.4 in the previous preliminary reading for the month of March, and against a expansion of 52.6 in February, as we may also witness about the economies of the euro area as a whole issued a reading The retail sales index for the euro area as a whole, which may explain the slowdown in growth to 0.1% compared to 0.6% last January.

On the other hand, investors are currently waiting for the US economy to disclose labor market data with the release of the employment change index for sectors other than agriculture, which may reflect the loss of 100 thousand jobs compared to 273 thousand added jobs in February, while the average income index reading may show Hourly growth slowed to 0.2% versus 0.3%. This is with the unemployment rate reading showing an increase from the lowest in five decades at 3.5% to 3.8%.

This comes before we witness the issuance of the final reading of the Service Supply Institute index by Markit for the United States, which may reflect the widening of the contraction to 38.7 compared to 39.1 in the initial reading for the past month and against a contraction at 49.4 in February, and before revealing the reading of the Institute of Supply Index Service, which may show a contraction of 43.5 compared to 57.3 in February.

We would like to point out, because the reading issuance at 50 or higher reflects a widening, while its issuance is less than 50 indicating a contraction, and that the service provision in America lies in the fact that the service sector represents more than two-thirds of the gross domestic product, otherwise, Wednesday, US President Donald Trump warned of The coming period is "painful" for his country, after he recently announced the extension of the quarantine in America until the end of this month to limit the spread of the Corona virus.

Technical analysis

The euro against the dollar trades stable at our first target 1.0840, and the price finds strong support there, but we expect to cross this level to open the way for heading towards our extended targets that reach 1.0700 then 1.0640, where the negative impact of the head and shoulders pattern is still effective.

Consequently, the downside trend will remain expected for the coming period, provided stability remains below 1.0966, with attention to the importance of being cautious during today's trading, as markets await unemployment and wages data on the American economy, which may cause strong and mixed trading in the markets, especially in light of the current conditions that relate to damage Economy due to the global epidemic and the spread of Corona virus

The expected trading range for today is between 1.0640 support and 1.0966 resistance.

Expected trend for today: bearish.