EURUSD analysis 09.04.2020

The single currency fluctuated the euro in a narrow range slanting up during the Asian session to witness its bounce for the second session in four sessions from the lowest since March 25 against the US dollar on the cusp of developments and economic data expected today by the economies of the euro area and the US economy, which includes the activities of meetings The Eurogroup and Fed Governor Jerome Powell speak at the Brookings Institution in Washington.

At 05:26 am GMT, the euro pair rose against the US dollar by 0.06% to 1.0865 levels compared to the opening levels at 1.0885 after the pair achieved its highest level during the trading session at 1.0880, while achieving the highest at 1.0854.

The market is looking for Germany, the largest economy in the eurozone, to publish the current account reading, which may reflect the widening of the surplus to 17.0 billion euros against 16.6 billion euros last January, in conjunction with the disclosure of the trade balance reading, which may also show the widening of the surplus to 16.5 billion euros, compared to 13.9 billion euros in January, amid expectations that exports will decline more than imports.

This comes before we witness the release of the industrial production reading for Italy, the third largest economy in the region, which may explain a 1.6% decline against a rise of 3.7% in January, and in conjunction with the activities of the Eurogroup meetings that enter on its third day and which are attended by the finance ministers of the member states in the region. The Commissioner for Economic and Monetary Affairs and the Governor of the European Central Bank, which discusses several financial issues such as mechanisms to support the euro and government funding.

It is noteworthy that the European Union finance ministers failed during their talks during their meetings to agree on further measures as part of efforts to support the economies of the euro area in the face of the repercussions of the outbreak of the Corona Virus. Behind the hindrance to progress in the talks and the lack of agreement to provide aid about half a trillion euros.

In another context, we also followed yesterday, the European Union's chief commissioner, Michel Barnier, said that it had been agreed to speak with the British negotiator about Britain's exit file from the European Union, David Frost, next week to agree on the next round of trade negotiations between Brussels and London, while he touched on the fact that work The European Commission is continuing and that negotiations should continue despite the difficulty of the present time with the outbreak of corona.

According to the latest developments in the global outbreak of the Corona virus, the Chinese city of Wuhan, where the coronary virus began appearing to last for more than two months, ended hopes that the deadly virus outbreak may have peaked, knowing that the European Union’s disease surveillance agency stated yesterday that the epidemic It still strikes and kills large numbers of people across the old continent.

On the other hand, investors are currently looking to the US economy for the publication of the index of subsidy requests for the past week on the fourth of April, which may reflect a decline of 1,648 thousand applications to 5,000 thousand requests compared to 6,648 thousand requests in the previous weekly reading, and this comes in conjunction with the disclosure On reading the PPI, which is an initial indicator of inflation, which may reflect the contraction in contraction to 0.3% compared to 0.6% last February.

In the same context, the core PPI reading may show stability at zero levels versus a 0.3% contraction in the previous reading in February, while the annual PPI reading may show a slowdown in growth to 0.5% compared to 1.3% in the previous annual reading of February February, and the core annual reading of the same indicator may also reflect slowing growth to 1.2% from 1.4% in February.

This comes before we witness the disclosure of the preliminary reading of the University of Michigan index of consumer confidence, which may show a decrease to 75.0 compared to 89.1 in March, in conjunction with the release of the final reading of the wholesale inventory index, which may reflect the stability of the decline at 0.5% during January. Last January, also in conjunction with the anticipated speech by Federal Reserve Governor Jerome Powell about his country's satellite economy at the Brookings Institution.

It is noteworthy that the Federal Reserve revealed yesterday, Wednesday, the minutes of the Federal Open Market Committee meeting held on the 15th of March, that surprising meeting, which was the second in less than two weeks after the previous surprising meeting on the third of the same month, which approved the monetary policy makers at The Federal Reserve returns 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 minutes of the meeting stated yesterday that the reduction decision is in effect 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, provided that Make these purchases at the appropriate speed to support the smooth performance of the stock market, treasury and mortgage market.

In another context, we followed yesterday, Trump expressed that he would like to open his country's economy through the "big bang", but the death toll from the outbreak of the coronavirus must be on the slope first, and it is stated that he announced in advance the extension of the quarantine in America until the end of this month to reduce From the spread of Corona, according to the latest figures issued by the World Health Organization, the number of cases has increased to nearly 1,357 thousand, and 79,385 people have died in 212 countries.

Technical analysis

The euro against the dollar fluctuates in a tight and sideways path since yesterday, and it moves near the 1.0840 level, where the moving average constitutes 50 continuous negative pressure against the price, waiting for the aforementioned level to open the way for the resumption of the descending path that targets 1.0700 then 1.0640 as the next main stations.

In general, the downside scenario will remain favorable for the coming period unless we witness a clear breach and stability above 1.0966.

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

Expected trend for today: bearish.