EURUSD analysis 11.06.2020

The Australian dollar fell during the Asian session to witness its bounce for the second session from the top since July 19, when it tested the highest for it since April 24, 2019, against the US dollar after the developments and economic data that it had reported on the Australian economy and on the eve of developments and economic data expected Today, Thursday by the US economy the largest economy in the world.

At exactly 02:54 AM GMT, the Australian dollar pair fell against the US dollar by 0.34% to 0.6974 levels compared to the opening levels at 0.6998, after the pair achieved its lowest level during the trading session at 0.6965, while the pair achieved its highest at 0.7005.

We have followed on from the Australian economy to reveal consumer expectations for inflation with the release of the Melbourne Institute's reading of consumer expectations for inflation, which showed a decrease to 3.3% compared to 3.4% last May, and that comes hours after the Weissbach consumer confidence index showed a rise of 6.3% to what Its value was 93.7, against a 16.4% increase at 88.1 in May.

On the other hand, investors are currently awaiting by the American economy the issuance of the index of subsidy requests for the week that expired 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 For the week ending 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.

Powell pointed out that the coronavirus and the measures that were adopted to limit its spread and specifically the closure of economies had a negative impact on economic activity and led to high unemployment, with his discussion that weak domestic demand and low oil prices have a negative impact on inflation, adding that the continuation of the current crisis will harm economic activity More employment, in addition to inflation in the short term, will reflect negatively on the economic outlook for the medium term.

Technical analysis

The Australian dollar versus the US dollar pair opens today's trading with a bearish tendency to approach the intraday upside channel support that is now at 0.6910, which requires attention from the upcoming trades, as breaking this level will push the price to test the main support at 0.6795 before any new attempt to rise.

Until now, the upside scenario is still effective, provided stability above 0.6910, noting that we are waiting for the visit of 0.7200 as a next main station.

The expected trading range for today is between 0.6870 support and 0.7020 resistance.

Expected trend for today: bullish.