EURUSD analysis 05.06.2020

The single currency fluctuated the euro in a narrow range slanting up during the Asian session to witness its stability near its highest in three months with its rise for the tenth consecutive session against the US dollar on the cusp of developments and economic data expected on Friday by the economies of the euro area and the US economy the largest economy in the world .

At 05:23 am GMT, the euro pair rose against the US dollar by 0.10% to 1.1349 levels, compared to the opening levels at 1.1338, after the pair achieved its highest level during the trading session at 1.1355, while achieving the lowest at 1.1326.

Markets are looking by Germany, the largest economy in the euro area, for the release of factory orders reading, which may show a widening decline to 20.0% compared to 15.6% last March, before we witness by Italy, the third largest economy in the region, the disclosure of the retail sales index reading that may It shows the decline decreased to 19.0% compared to 20.5% in March.

This comes hours after the end of the European Central Bank’s five-day meeting, during which the monetary policy makers of the European Central Bank kept short-term reference interest rates at their zero levels, in addition to fixing the marginal lending rate at 0.25% and maintaining the interest rate on negative deposits -0.50% Which came in line with expectations.

We also followed yesterday that the European Central Bank increased its bond purchase program to combat the economic repercussions of the Corona virus, known as "PEPP" by 600 billion euros to 1,350 billion euros, exceeding market expectations at 500 billion euros only, as part of the work of monetary policy makers to provide support to the economies The euro zone, which is expected to witness a contraction of at least 8% this year.

It is noteworthy that the alliance of German Chancellor Angela Merkel agreed last Wednesday on a comprehensive stimulus package worth 130 billion euros designed to stimulate investor spending in the short term and companies ’investments. We also followed Wednesday, German Foreign Minister Heiko Maas confirmed his country’s lifting of the travel ban for EU member states starting from 15 This June, this was part of the reopening of global economies.

In another context, we followed Wednesday warning the regional director at the World Health Organization in Europe, Hans Klugi, that there is a clear threat of a second wave of corona virus spread, which may be devastating, especially with the gradual easing of restrictions, while emphasizing that the occurrence of a second wave of coronavirus is not Inevitably, he explained that the current time is not better than what we were at the beginning of the year, especially that no vaccine or treatment for the virus has been reached yet.

In the same context, the chief researcher of the World Health Organization also stated yesterday that there is no evidence about finding an effective drug that reduces deaths from coronavirus, while urging experts to continue all experiments to find the appropriate treatment for the virus, according to the latest figures issued by the organization, the number of Corona virus cases have reached nearly 6.42 million, and 382,867 people have died in 216 countries.

On the other hand, investors are currently awaiting by the American economy the disclosure of labor market data with the release of the employment change index for sectors other than agriculture, which may reflect the loss of 7,750 thousand jobs compared to the loss of 20,537 thousand jobs last April, while an average index reading may show Income per hour, growth slowed to 1.0%, compared to 4.7%. That is, with the unemployment rate reading up to 19.4% compared to 14.7% in April.

Technical analysis

The EURUSD pair confirmed the breach of the 1.1295 level after the daily candle closed above it, to open the way for the bullish trend over the intraday and short term, noting that the following positive targets are located at 1.1418 and extend to 1.1500.

SMA 50 continues to support the suggested bullish wave, noting that a break of 1.1295 will put the price under negative pressure and a bearish move over the intraday basis.

The expected trading range for today is between 1.1260 support and 1.1430 resistance.

Expected trend for today: bullish.