EURUSD analysis 07.08.2020

The single currency, the euro, fluctuated in a narrow range that tends to decline during the Asian session, to witness its retracement of the second session from the lowest since May 15, 2018, against the US dollar before the 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 exactly 05:44 AM GMT, the euro pair fell against the US dollar by 0.30% to 1.1841 levels, compared to opening levels at 1.1877, after the pair achieved its lowest level during the session's trading at 1.1820, while it achieved its highest at 1.1883.

The markets are looking by Germany, the largest economy in the euro area, to reveal the seasonally adjusted reading of the current account index, which may reflect the widening of the surplus to 14.2 billion euros compared to 6.5 billion euros last May, and the seasonally adjusted reading of the trade balance index showed the expansion of the surplus to 10.3 billion Euro compared to 7.6 billion euros, and amid expectations that the seasonally adjusted reading of exports and imports will show an increase in June.

This comes in conjunction with the disclosure by the most industrialized country in the European Union, Germany, of the seasonally adjusted reading of the industrial production index, which may show an acceleration of growth to 8.3% compared to 7.8% in May, before we see France, the second largest economy in the eurozone. The second largest industrial country in the region was the release of the Industrial Production Index, which may reflect a slowdown in growth to 8.6%, compared to 19.6% in May.

We are also looking forward to France for the release of the preliminary reading of the wages index in the private sector, which may reflect a contraction of 1.0% compared to 2.5% in the last first quarter, in conjunction with the release of the French Trade Balance reading, which may indicate the stability of the deficit at 7.1 billion euros in June / June, leading to the disclosure by Italy, the third largest economy in the region, of the June trade balance index reading.

On the other hand, investors are currently awaiting the US economy to unveil labor market data, with the release of the employment change index reading for the non-agricultural sectors, which may reflect 1,530,000 jobs added compared to 4,800,000 jobs added in June, while the average income index reading may indicate Per hour, the decline narrowed to 0.5% from 1.2%. This is with the unemployment rate reading showing a decline to 11.1% compared to 12.3% in June.

This comes before we witness the release of the final reading of the wholesale inventories index, which may confirm a decline of 2.0%, unchanged from the previous initial reading for the month of June and against a decline of 1.2% in May, and the consumer credit reading showed an increase to about $ 10.0 billion against It fell to $ 18.3 billion in May, in conjunction with US lawmakers' discussions about the anticipated virus relief package by Congress.

Technical analysis

The euro versus dollar pair starts today's trading with strong negativity, to break the 1.1850 level and settle below it, which puts the price under more negative pressure expected in the intraday term, on its way to test levels of 1.1790 then 1.1737 mainly.

Thus, the bearish bias will be likely for today, noting that we are waiting for a bullish reversal to resume the main bullish trend after testing the aforementioned levels, bearing in mind that a break of 1.1737 will push the price to achieve more decline and head towards 1.1632 as a next negative station, while the expected decline will remain valid. Unless the price was able to rally to the upside to breach 1.1908 level and hold above it.

It should be noted that caution is required during today's trading, especially at the time of the release of US economic data, which may cause strong and mixed trades on the major currency pairs.

The expected trading range for today is between 1.1737 support and 1.1900 resistance.

The expected general trend for today: Bearish.