EURUSD analysis 29.04.2020

The euro currency fluctuated in a narrow range tilted to the upside during the Asian session to witness its bounce back for the third session in four sessions from the lowest since March 24 against the US dollar on the cusp of developments and economic data expected today Wednesday by the economies of the euro area and the US economy, which includes the activities Federal Open Market Committee meeting and Federal Reserve Governor Jerome Powell press conference.

At 05:17 am GMT, the euro pair rose against the US dollar by 0.27% to 1.0849 levels, compared to the opening levels at 1.0820, after the pair achieved its highest level during the trading session at 1.0854, while achieving the lowest at 1.0819.

Investors are looking to the largest euro-zone economies, Germany, for the release of the import price index, which may reflect the widening decline to 2.3% compared to 0.9% in February, as the annual reading of the same indicator may show the widening decline to 4% compared to 2%, before that We are also witnessing the disclosure of inflation data for Germany with the release of the initial reading of the consumer price index, which may reflect stability at zero levels against 0.1% growth in March.

Otherwise, tomorrow (Thursday) markets are looking to the ECB meeting, through 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 deposit interest rate negative -0.50%. The size of the Emergency Bond Purchase Package (PEPP) is expected to increase by 500 billion euros to 1.25 trillion euros.

On the other hand, investors are currently awaiting by the US economy the disclosure of the initial reading of the United States GDP for the first quarter, which may show the contraction of the largest economy in the world 4.0% compared to the growth of 2.1% in the fourth quarter, while the initial reading may reflect the measured GDP With prices from the last quarter, the pace of growth slowed to 1.0% compared to 1.3% in the fourth quarter.

This comes before we witness the disclosure of housing market data with the release of existing home sales, which may show a decline of 13.3% against a rise of 2.4% in February, and in conjunction with the activities of the Federal Open Market Committee meeting April 28-29, which is expected to remain Through which the monetary policymakers of the Federal Reserve on benchmark interest rates at zero levels between zero and 0.25%.

Up to the events of the press conference that will be held by Federal Reserve Governor Jerome Powell, which comes half an hour after the end of the activities of the meeting of the Federal Open Market Committee in Washington, and it is reported that the Federal Committee approved at the surprising previous meeting held on March 15, which was the second in Less than two weeks after the previous snap meeting on the third of the same month, returning interest to zero levels.

It is noteworthy that the Federal Committee reduced the interest on federal funds in the previous meeting by 100 basis points from between 1.00% and 1.25% to zero levels, which it remained from 2008 until the meeting of 27-28 October 2015, after reducing it at the emergency meeting The previous rate of 50 basis points from between 1.50% and 1.75%, and in the wake of cutting interest three times by 25 basis points in previous meetings last year.

In the same context, the Federal Open Market Committee announced in the middle of last month that it will carry out repurchases of treasury bonds of at least $ 500 billion per month and mortgage-backed securities of at least $ 200 billion per month, provided that these purchases are made at the appropriate speed to support The smooth performance of the stock market, treasury and mortgage agency.

Technical analysis

The euro against the dollar ended yesterday's trading below the 1.0840 level, which makes us continue to favor the bearish direction in the intraday and short term, which mainly targets 1.0700 then 1.0640 levels, noting that a break of 1.0795 will facilitate the price task by achieving the proposed goals.

Stability below 1.0840 is important for the expected bearish continuation, as breaching it will push the price to shift towards the intraday rise and visit the 1.0966 level again.

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

Expected trend for today: bearish.