EURUSD analysis 01.09.2020

The single currency, the euro, rose during the Asian session, to witness its highest since the third of May of 2018 against the US dollar, on the cusp of economic developments and data expected today, Tuesday, by the economies of the euro area and the US economy, the largest economy in the world.

At 06:27 AM GMT, the euro pair rose against the US dollar by 0.43% to 1.1987 levels, compared to opening levels at 1.1936, after the pair achieved its highest level during the session's trading at 1.1997, while it reached its lowest level at 1.1935.

The markets are looking forward to the disclosure by the fourth-largest economy in the euro area, Spain, of the manufacturing PMI reading, which may reflect a contraction of the expansion to a value of 52.5 compared to 53.5 in July, before we witness about Italy, the third-largest economy in the region, the release of the same index reading. It might show an expansion to 52.0, compared to 51.9 in July.

This comes before we witness the release of the final reading of the manufacturing PMI for France, the second-largest economy in the euro area, and Germany, the largest economy in the region, in addition to the economies of the euro area as a whole, which may reflect the stability of the contraction in France at 49.0 compared to an expansion of 52.4 in July, and the stability The breadth in Germany is at 53.0 versus 51.0, in addition to the stability in the region as a whole at 51.7 versus 51.8.

In the same context, the markets are looking to reveal labor market data for the major economies of the euro area, starting from the release of the unemployment change index reading for Germany, which may show the decline to 3 thousand compared to 18 thousand in July, through the issuance of the unemployment rate reading for Italy, which may indicate an increase To 9.1% compared to 8.8% in July, leading to the release of the unemployment rate reading for the euro area as a whole, which may reflect an increase to 8.0% compared to 7.8% in July.

This comes in conjunction with the disclosure of inflation data for the euro area as a whole with the release of the annual consumer price index reading, which may reflect a slowdown in the pace of growth to 0.2% compared to 0.4% in the previous annual reading for July, as the core annual reading of the index may indicate the slowing pace of growth to 0.9%, compared to 1.2% in July.

On the other hand, the markets are looking to unveil the final reading of the manufacturing PMI by Markit from the United States, which may reflect the stability of the expansion at a value of 53.6, unchanged from the initial reading for the past month and against 50.9 in July, before we witnessed it before. The US economy released the reading of the construction spending index, which showed an increase of 1.0% against a decline of 0.7% in June.

Up to the disclosure by the largest industrial country in the world of a reading of the Industrial Supply Institute index, which may show an expansion to 54.6 compared to 54.2 in July, while the reading of the same index measured by prices may indicate a decrease in the breadth to 52.0 compared to 52.3, before we witness the participation of a member of the Federal Reserve Open Market and Fed Deputy Governor Lyle Brainard in a hypothetical discussion on the economic outlook hosted by the Brookings Institution.

Technical analysis

The euro versus dollar pair opens today's trading with a strong bullish tendency to surpass 1.1965 and try to return to the minor ascending channel that appears in the image, which supports the continuation of our expectations for the bullish trend effectively for the coming period, paving the way to head towards our next target, which reaches 1.2160.

The SMA 50 continues to support the suggested bullish wave, noting that holding above 1.1935 represents a prerequisite for the continuation of the bullish rally, as breaking it may pressure the price to initially test 1.1845 areas before any new attempt to rise.

The expected trading range for today is between 1.1900 support and 1.2090 resistance.

The expected general trend for today: Bullish.