EURUSD analysis 27.04.2020

The single currency, the euro, rose during the Asian session to witness its bounce for the second consecutive session from the lowest since March 24 against the US dollar, amid the scarcity of economic data by the euro area and the US economy at the beginning of this week, which carries with it the activities of the Federal Open Market Committee meeting tomorrow, Tuesday and Wednesday, and the European Central Bank meeting next Thursday.

At exactly 06:11 am GMT, the euro pair rose against the US dollar by 0.47% to 1.0855 levels, compared to the opening levels at 1.0804, after the pair achieved its highest level during the trading session at 1.0859, while achieving the lowest at 1.0799, with Knowing that the pair started the trading session on a falling price gap after it concluded the trading last week at 1.0823 levels.

Next Thursday, the markets are looking to the activities of the European Central Bank meeting, during which monetary policymakers are expected to keep interest rates at their current zero levels and stabilize the marginal lending rate at 0.25% in addition to keeping the interest rate on negative deposits -0.50%, as expected. During which the size of the emergency bond purchase package (PEPP) will be increased by 500 billion euros to 1.25 trillion euros.

On the other hand, investors are looking forward to tomorrow, Tuesday, to the launch of the FOMC meeting, April 28-29, in which the short-term benchmark interest rates are expected to remain at zero levels between zero and 0.25% before we witness after Tomorrow, Wednesday, the press conference Fed Governor Jerome Powell's meetings will be held half an hour after the FOMC meeting in Washington expires.

We would like to point out, that the Federal Reserve monetary policymakers adopted at the previous Federal Open Market Committee meeting held 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, to return interest on Federal funds to zero levels while reducing interest rates at the time by 100 basis points from between 1.00% and 1.25%.

It is noteworthy that the return of the members of the Federal Open Market Committee to the interest of the federal funds to the zero levels that remained since 2008 until the meeting of 27-28 October 2015, and came after reducing them in the previous emergency meeting by 50 basis points from between 1.50% and 1.75 %, And after the committee members cut interest three times by 25 basis points in previous meetings last year 2019.

Technical analysis

The euro against the dollar pair presented positive trades at the end of last Friday, as it approached the level of 1.0840, noting that SMA 50 meets this resistance to add more strength to it, while the stochastic indicator is losing its positive momentum to reach the overbought areas.

Consequently, these factors encourage us to continue to favor the bearish trend for the upcoming period, which mainly targets 1.0700 then 1.0640 levels, noting that a breach of 1.0840 will lead the price to achieve more gains and head towards 1.0966 as a first positive target.

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

Expected trend for today: bearish.