EURUSD analysis 11.06.2020

The single currency, the euro, fell during the Asian session to witness its rebound to the second session from its highest since March 10 against the US dollar, on the threshold of economic developments and data expected today, Thursday, by the Eurozone economies, which include Eurogroup meetings via satellites in Brussels and on the cusp of developments and data Expected economic from the US economy, the largest economy in the world.

At 05:31 am GMT, the euro pair fell against the US dollar by 0.33% to 1.1337 levels, compared to the opening levels at 1.1374 after the pair achieved its lowest level during the trading session at 1.1325, while achieving the highest at 1.1395.

The markets are looking for France, the second largest economy in the eurozone, for the final reading of the change in employment in sectors other than agriculture, which may confirm a decline of 2.3% during the first quarter compared to a rise of 0.5% in the fourth quarter, before we witness Italy the third largest economy in the region. On the data of the industrial sector, with the release of the Industrial Production reading, which may explain the decline decreased to 24.0% compared to 28.4% in March.

This comes in conjunction with the meetings of the Eurogroup via satellite, which are attended by the finance ministers of the member states in the region, the Commissioner for Economic and Monetary Affairs and the European Central Governorate, which discusses many financial issues such as the mechanisms of supporting the euro and government financing, led by the European Union recovery package from the repercussions The negative of the Corona virus outbreak and the identification of the next head of the Eurogroup.

In another context, we followed yesterday the chief European Union negotiator expressed to Britain’s exit file from the European Union, Michel Barnier, that the European Union’s relationship with Britain will differ from its relationship with Canada or Japan, indicating that Britain has a distinguished position in terms of proximity or trade with the European Union. And adding that no commercial agreement can be reached with Britain without a deal on fishing and an equal relationship.

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 the fifth of this month, which may reflect a decline of 327 thousand applications to 1,550 thousand applications compared to 1,877 thousand requests in the previous reading, as may appear the reading of ongoing subsidy requests Last week, on May 29, it decreased by 1,487 thousand requests to 20,00 thousand requests compared to 21,487 thousand requests.

This comes in conjunction with the release of the producer price index, which is an initial indicator of inflation, which may reflect 0.1% growth versus a 1.3% contraction last April, while a substantial reading of the same indicator may show contraction shrinking to 0.1% versus 0.3%, and the annual reading may appear The index has the contraction stable at 1.2%, little changed from the previous annual reading, while the substantial annual reading may reflect slowing growth to 0.4% compared to 0.6%.

Other than that, yesterday we followed the expiry of the two-day FOMC meeting, during which the Federal Reserve monetary policy makers kept the interest on federal funds at between zero and 0.25% for the second meeting in a row, which came in line with expectations And, with the disclosure of the expectations of the members of the Committee to the rates of growth, inflation and unemployment in addition to the future interest rates for the next three years.

This has included expectations of members of the Federal Committee to stay on interest rates at zero levels until 2022 and that the US economy may contract 6.5% during 2020 and that unemployment rates may reach 9.3% by the end of the year before falling to 6.5% in 2021 and 5.5% in 2022, and came Hours after the CPI reading showed inflation contracted for the third consecutive month in May to reflect the longest deflation period ever.

We also followed yesterday, Wednesday, the press conference held by Federal Reserve Governor Jerome Powell to comment on the decisions of the Federal Committee, through which he emphasized the Federal Reserve’s commitment to use all tools to support the American economy in light of the current challenges to achieve the goal of inflation, price stability and access to optimal exploitation of the labor market, explaining Corona virus has caused extensive health and economic damage in America and abroad.

Technical analysis

The euro rally against the bullish dollar stopped at the level of 1.1418, where it finds strong resistance there, and it needs to get enough positive momentum to push trading to breach this level and open the way for heading towards our next target which is located at 1.1500.

The graph shows that the price is moving inside an ascending channel that supports the chances of the continuation of the bullish bias during the upcoming sessions, so we continue to favor the bullish trend with the support of the EMA50, noting the importance of holding above 1.1295 to achieve the awaited targets.

The expected trading range for today is between 1.1300 support and 1.1480 resistance.

Expected trend for today: bullish.