EURUSD analysis 20.05.2020

The single currency fluctuated the euro in a narrow range tilted to the upside during the Asian session to witness its rebound to the seventh session in ten sessions from the lowest since April 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 American economy the largest economy In the world.

At 05:03 am GMT, the euro pair rose against the US dollar by 0.17% to 1.0942 levels, compared to the opening levels at 1.0923 after the pair achieved its highest level during the trading session at 1.0947, while achieving the lowest at 1.0919.

The markets are looking to reveal the current account index reading for the eurozone economies as a whole for April before we witness the disclosure of inflation data also for the region as a whole with the release of the annual final reading of the consumer price index, which may reflect the stability of growth at 0.4%, unchanged from the reading Preliminary for the last month and compared to 0.7% last March.

The core annual CPI reading for the eurozone as a whole may also show stability in growth of 0.9% as well, with little change from the initial reading and 1.0% in the previous annual reading for the month of March, up to the disclosure of the CPI reading for the region as a whole, which may appear The contraction stabilized at $ 23, little changed from the previous reading in April.

On the other hand, markets are currently awaited by the US economy, as the Federal Reserve revealed the minutes of the Federal Open Market Committee meeting held on April 28-29, in which it decided to stabilize interest on federal funds at zero levels between zero and 0.25%. , Which came in line with expectations at the time, amid stressing the way forward in using all tools to support the American economy in these difficult times.

It is reported that members of the Federal Committee expressed at the end of last month that the outbreak of the Coronavirus had 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 reduce inflationary pressures while benefiting That this health crisis will broadly affect economic activity and the labor market as well as inflation.

The members of the Federal Committee also mentioned at the time that interest rates are expected to remain at zero levels to support the flow of credit to families and companies and that the Federal Reserve is moving forward in purchasing treasury bonds at $ 500 billion per month and mortgage bonds at least $ 200 per month when the economy showed signs of recovery in the wake of overcoming the current crisis and achieving price stability in addition to an improvement in the labor market.

The Federal Committee also stated at the time that it would continue to follow 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 What is needed.

Otherwise, yesterday we followed the statement of Federal Reserve Governor Jerome Powell and US Treasury Secretary Stephen Manuchin before the Senate Satellite Banking, Housing and Urban Affairs Committee, and Powell emphasized that the Federal Reserve will keep interest rates at zero levels until recovery Economy and achieving the goal of inflation, and he is committed to using all his tools to support the economy in this difficult period.

It is noteworthy that the Federal Reserve Governor Powell warned last Sunday in the program "60 minutes" on the "CBS" channel that the economic downturn may continue until late 2021, explaining that the economic downturn in his country may reach between 20% and 30% "easily During the current quarterly quarter, with the outbreak of the Coronavirus, he explained that he expected the economy to "recover steadily during the second half of this year," as long as America avoided "the second wave of the virus."

Powell then noted that "it is very important to avoid this. It will be devastating to the economy and public confidence," adding that "assuming there is no second wave of the virus, I think you will see the economy recover steadily during the second half," explaining that "in order for the economy to fully recover". A vaccine must wait, "Powell also called on US lawmakers to pass more economic incentives and relief aid, while telling him that unemployment rates could peak at 25%.

Technical analysis

The euro against the dollar succeeded in achieving our awaited target at 1.0966 and bounced down from there, which signals the price trend to achieve a more expected decline during the upcoming sessions, on its way to visit the 1.0840 level as a next main station.

Therefore, the bearish bias will be expected for today, taking into consideration that the breach of 1.0966 will stop the suggested decline and lead the price for additional gains reaching 1.1067.

The expected trading range for today is between 1.0840 support and 1.1000 resistance.

Expected trend for today: bearish.