EURUSD analysis 08.04.2020

The single currency, the euro, fell during the Asian session to witness its rebound to the seventh session in nine sessions from the top since last March 17 against the US dollar amid the scarcity of economic data by the economies of the euro area and on the cusp of developments and economic data expected today Wednesday by the American economy, the largest economy in the world.

At exactly 05:09 am GMT, the euro pair fell against the US dollar by 0.22% to 1.0868 levels compared to the opening levels at 1.0892 after the pair achieved its lowest level during the trading session at 1.0859, while achieving the highest at 1.0902.

Investors are now looking to the US economy for the Federal Reserve to unveil the minutes of the Federal Open Market Committee meeting that took place on March 15th, that surprising meeting, which was the second in less than two weeks after the previous sudden meeting on the third of the same month, which was approved Federal Reserve monetary policy makers return their short-term benchmark interest rates to zero levels.

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 remained since 2008 until the meeting of 27-28 October 2015, after reducing them in the previous emergency meeting by 50 points The basis is between 1.50% and 1.75%, 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's monetary policy statement stated at the time that the reduction decision is from March 16, and that the Federal Open Market Committee will undertake repurchases of treasury bonds with at least $ 500 billion per month and mortgage-backed securities of at least $ 200 billion per month, at least. These purchases are made at the appropriate speed to support the smooth performance of the stock market, treasury and mortgage agency.

The statement also stated at the time to move forward in conducting forward and night repurchase agreements to ensure that the supply of reserves remains ample and support the smooth performance of the dollar financing markets in the short term, and Federal Reserve Governor Jerome Powell noted at the press conference held after the meeting at the time that the US economy was not It continues to grow despite rapid developments and that the Corona virus has a clear impact on the US and global economy.

Powell said at the time that the repercussions of the virus will be clear in the near term and affect the economic outlook, adding that the global economic weakness will have a negative impact on US exports and that in light of these developments, the Federal Committee decided to cut interest to zero levels and that it is expected to remain on it until the risks are confirmed. The return of the economy to moderate growth, achieving the optimum utilization of the labor market, and achieving the inflation target of 2%.

Powell also noted that the Federal Reserve is coordinating with major central banks such as the Bank of Canada, the Bank of Japan and the Bank of England and that the major banks have agreed to cut interest and that they will work to provide liquidity from the dollar and that the monetary policy in his country was noticeably strict and that he did not think it would be appropriate to resort To the negative benefit in America.

In the same vein, Powell expressed the monetary stimulus required by the American administration, with his statement that the American banking sector is strong and has a lot of capital and liquidity, and it is reported that US President Donald Trump recently signed a stimulus package estimated at $ 2 trillion to support the largest economy In the world, American families and companies are facing the repercussions of the Corona virus after the bill was passed in the US Congress last month.

We would like to point out that US President Trump recently warned that the coming period is "painful" for America, after he announced earlier this month that the quarantine would be extended in the United States until the end of April to reduce the spread of the Corona virus, according to the latest figures released by The organization has increased the number of HIV-positive cases to nearly 1,283 thousand, and 72,774 people have died in 211 countries.

Technical analysis

The euro against the dollar pair begins trading today with a bearish tendency to approach the pivotal support level 1.0840, where the MA 50 formed a good negative pressure against the price, while the stochastic indicator provides negative signals on the four-hour time frame.

Consequently, these factors encourage us to favor the domination of negative trades during the upcoming sessions, and the price needs to break the mentioned support to confirm opening the way towards 1.0700 then 1.0640 levels as the next major targets, noting that a breakout of 1.0966 will stop the suggested negative scenario and push the price for additional gains that reach To 1.1067.

The expected trading range for today is between 1.0750 support and 1.0950 resistance.

Expected trend for today: bearish.