EURJPY analysis 20.08.2020

The single currency, the euro, fluctuated in a narrow range sloping upward during the Asian session, to witness the resumption of its rebound from its lowest since the third of August for the sixth in seven sessions against the US dollar on the cusp of developments and economic data expected today, Thursday, by the economies of the euro area and the US economy, the largest economy In the world.

At 06:21 AM GMT, the euro pair rose against the US dollar by 0.03% to 1.1842 levels, compared to the opening levels at 1.1838, after the pair achieved its highest level during the session's trading at 1.1854, while it reached its lowest level at 1.1831.

Investors are currently awaiting by the largest economy in the euro area, Germany, the release of the producer price index reading, which is a preliminary indicator of inflationary pressures, which may show 0.1% growth versus stability at zero levels last June, and this comes before we witness the European Central Bank unveiled the minutes It's last meeting, during which it decided to keep interest rates at zero levels.

On the other hand, investors are currently awaiting the American economy for the release of the aid requests index reading for the past week on August 15th, which may reflect a decline of 33 thousand applications to 930 thousand applications compared to 963 thousand applications in the previous reading. The reading of aid requests may also appear. Continuing for the past week on the eighth of this month, a decrease by 486 thousand requests to 15.0 million requests, compared to 16,486 thousand requests in the previous reading.

This comes in conjunction with the disclosure by the largest industrial country in the world of industrial sector data with the release of the Philadelphia Industrial Index reading, which may reflect a contraction of the expansion to a value of 21.0 compared to 24.1 last July, before we witness the release of the leading indicators reading, which may It shows that the pace of growth has slowed to 1.0%, compared to 2.0% in June.

Other than that, we have just followed up on the Fed’s disclosure of the minutes of the Federal Open Market Committee’s meeting held on July 28-29 in which monetary policymakers at the Fed addressed the fact that the current situation surrounding the Corona pandemic could “severely affect Economic activity, employment and inflation are in the near term and pose significant risks to the economic outlook in the medium term. "

It is noteworthy that Federal Reserve Governor Jerome Powell stressed in the press conference held after the meeting at the time that the Fed was committed to using all its tools to support the recovery and reduce the negative repercussions of the Corona pandemic, and according to the latest figures issued by the World Health Organization, the number of cases infected with the Coronavirus increased to nearly 21.99 million and 775,893 died. People killed in 216 countries.

Technical analysis

The EUR / USD pair traded with strong negativity yesterday, reaching support for the ascending channel now, in conjunction with positive signs appearing on the stochastic indicator, noting that the SMA 50 is trying to protect the price from incurring more losses.

Thus, we believe that opportunities are available to rebound to the upside and resume the main bullish trend, which extends its next main target to 1.2070, while breaking 1.1825 represents the key to the extension of the descending wave, targeting additional negative levels that start at 1.1710 and extend to 1.1645.

The expected trading range for today is between 1.1760 support and 1.1940 resistance.

The expected general trend for today: Bullish.