EURUSD analysis 30.04.2020

The single currency fluctuated the euro in a narrow range slanting back down during the Asian session to witness its bounce for the second session in three sessions from its highest since April 22 against the US dollar on the cusp of developments and economic data expected today Thursday by the economies of the euro area and the US economy, which includes the activities ECB meeting and press conference for the European Central Governorate Christine Lagarde.

At exactly 05:58 am GMT, the euro against the US dollar fell 0.05% to 1.0868 levels, compared to the opening levels at 1.0873, after the pair achieved its lowest level during the trading session at 1.0852, while achieving the highest at 1.0879.

The markets are looking to the French economy, the second-largest in the region, to reveal the growth data for the first quarter with the release of the initial reading of the GDP index, which may reflect the widening contraction to 4.0% compared to 0.1% in the fourth quarter, and that comes, before we witnessed by Germany The biggest euro area economy is the disclosure of the retail sales index, which may reflect an 8.1% decline compared to a rise of 1.2% last February.

In the same context, the annual reading of the retail sales index for Germany may show a decrease of 2.8% against a rise of 6.5% in February, before we witness from France the preliminary reading of the consumer price index, which may indicate a 0.2% contraction against stability at zero levels in March Last March, coinciding with the disclosure of the consumer spending reading, which may show the widening decline to 5.7% compared to 0.1% in February.

To reveal the growth data for the fourth-largest economy in the euro area Spain with the release of the initial reading of the GDP index, which may reflect a contraction of 4.2% compared to 0.4% growth in the fourth quarter, in conjunction with the release of the annual reading of the consumer price index for Spain, which may also reflect a 0.5% contraction Versus stability at zero levels in the previous annual reading for the month of February.

Markets are also looking to disclose labor market data with the release of the unemployment change reading for Germany, which may reflect an increase of about 75 thousand against a rise of 1 thousand in March, before the release of the unemployment rate reading for Italy, which may indicate an increase to 10.5% compared to 9.7% in March, through to the disclosure of the unemployment rate reading for the economies of the euro area as a whole, which may reflect a rise to 7.7% compared to 7.3% in March.

This comes in conjunction with the disclosure of the growth and inflation data for the euro area as a whole with the release of the initial reading of the GDP index, which may reflect a contraction of 3.7% against 0.1% growth in the fourth quarter, and the annual reading of the consumer price index showed a slowdown in growth to 0.1% compared to 0.7% in March March, as the annual core reading of the same index may show, growth slowed to 0.7% versus 1.0%.

Up to the ECB’s activities, during which interest rates are expected to remain at their zero levels and to fix the marginal lending rate at 0.25%, in addition to maintaining a negative interest rate on deposits -0.50%, while the size of the emergency bond purchase package is expected to increase (PEPP), by 500 billion euros to 1.25 trillion euros, before the upcoming press conference of the European Central Governorate Christine Lagarde.

On the other hand, investors are currently awaiting by the US economy the issuance of the index of subsidy requests for the last week on April 25, which may reflect a decline of 927 thousand requests to 3,500 thousand requests compared to 4,427 thousand requests in the previous weekly reading, while it may appear reading requests The ongoing benefit for the last week on the 18th of this month, increasing by 3,262 thousand applications to 19,238 thousand applications compared to 15,976 thousand requests.

This comes in conjunction with the disclosure of personal spending and income data, which may reflect a decrease in personal spending by 4.8% against a rise of 0.2% in February, and a decrease in personal income by 1.6% against a rise of 0.6% in February, as the reading of the personal consumption expenditures index may show. Al-Jawhary declined 0.1% compared to a 0.2% increase in February.

It also comes in conjunction with the disclosure of the reading of the unit cost index, which may reflect the stability of growth at 0.7%, little changed from what it was in the last quarter, and before we witness the disclosure of industrial sector data for the largest industrial country in the world with the release of the index reading Chicago Purchasing Managers, which may reflect the widening contraction to 38.0 compared to 47.8 last March.

Otherwise, yesterday we followed the Fed’s monetary policymakers ’decision to keep short-term benchmark interest rates at zero levels between zero and 0.25% at the FOMC meeting April 28-29, which came in line with expectations And, members of the Committee stressed that they are moving forward in using all the tools of the Federal Reserve to support the US economy in these difficult times.

In the same context, members of the Federal Open Market Committee discussed the fact that the outbreak of the Coronavirus has caused human and economic suffering within the United States and abroad and that the preventive measures adopted by countries globally weigh on economic activity and that the decline in demand and the collapse of oil prices reduces inflationary pressures while benefiting That this health crisis will broadly affect economic activity and the labor market in addition to inflation.

The members of the Federal Committee also mentioned that the interest rate on federal funds is expected to remain at zero levels to support the flow of credit to families and companies and that the Federal Reserve is going ahead with the purchase of treasury bonds at $ 500 billion per month and mortgage bonds at least $ 200 per month until the economy has shown signs of recovery following the current crisis and stabilizing prices, as well as an improvement in the labor market.

The Federal Committee also stated that it will continue to follow the economic data and data related to health care and global developments and assess the current and expected conditions within its work to reach the goal of inflation at two percent and achieve the maximum benefit in the labor market, adding that it will monitor the market conditions closely and is ready to amend its tools if It took that.

The decisions and directions of the Federal Committee came yesterday hours after the initial reading of the GDP showed the largest contraction for the United States from the last quarter of 2008 with a contraction of 4.8% in the first quarter before we witnessed the Federal Reserve Governor Jerome Powell at the press conference held in Following the end of the activities of the Federal Committee meeting, he expected his country to shrink its economy in an unprecedented way in the second quarter.

Technical analysis

The euro against the dollar pair conducted a new test of the pivotal resistance 1.0885 without being able to breach it until now so that the price remains confined between this resistance - which represents the neckline of the inverted head and shoulders pattern - and the support of 1.0840, and therefore, we continue in neutral expectations until the price confirms the penetration of one of the These two levels.

We point out that breaching the mentioned resistance will activate the positive effect of the bullish pattern and push the price to achieve positive targets that start at 1.0966 and extend to 1.1067 while breaking the support represents the key to returning to the main downside path whose next targets are located at 1.0700 then 1.0640.

The expected trading range for today is between 1.0750 support and 1.0970 resistance

Expected trend for today: It depends on the levels mentioned in the report.