EURUSD analysis 03.09.2020

The single currency, the euro, fluctuated in a narrow range that tends to decline during the Asian session, to witness its rebound for the third consecutive session from its highest since May 2 of 2018 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. Economy in the world.

At exactly 06:08 AM GMT, the euro pair fell against the US dollar by 0.40% to 1.1807 levels, compared to the opening levels at 1.1855, after the pair achieved its lowest level during the session's trading at 1.1805, while it achieved its highest at 1.1855.

The markets are currently looking for Spain, the fourth-largest economy in the eurozone, to unveil the service PMI reading, which may show a contraction to 48.0, compared to an expansion of 51.9 in July, and this comes before we see Italy, the third-largest economy in the region, the release of a reading. The managers index itself, which may also reflect a contraction to a value of 49.4, compared to an expansion of 51.6 in July.

This comes before we witness about France, the second-largest economy in the euro area, the disclosure of the final reading of the services PMI index, which may show the stability of the expansion at 51.9, unchanged from the initial reading for the past month, and against a widening at 57.3 in July, before we witness the reading. The final index of the same index for Germany, the largest economy in the region, also stabilized the breadth at 50.8, unchanged from the initial reading, and compared to a widening at 55.6.

Up to the release of the final reading of the service purchasing managers' index for the economies of the euro area as a whole, which may reflect the stability of the expansion at 50.1, unchanged from the initial reading for the past month and compared to a widening at 54.7 in July, before the retail sales index reading also revealed for the region’s economies as a whole. It reflects a slowdown in growth to 1.3%, compared to 5.7% last June.

On the other hand, investors are currently awaiting the American economy to unveil the final reading of the productivity index and the cost of one work, and it is expected that the reading of the productivity index will show stability of growth at 7.3%, with little change from the preliminary reading for the second quarter, compared to a contraction of 0.9% in the previous reading of the first quarter. While the cost index reading may indicate a slowdown in growth to 12.0% compared to a growth of 12.2% in the preliminary reading and compared to a growth of 5.1% in the first quarter.

This comes in conjunction with the release of the aid requests index reading for the past week on August 29th, which may reflect a decline of 51 thousand applications to 955 thousand applications compared to 1,006 thousand applications in the previous weekly reading. Also, the reading of continuous aid requests for last week may appear on the 22nd of August. Last month, a decrease of 535 thousand requests to 14 million requests compared to 14,535 thousand requests in the previous weekly reading.

This also comes in conjunction with the release of the merchandise trade balance reading, which may explain the widening of the deficit to a value of $ 58.2 billion, compared to $ 50.7 billion in June, leading to the disclosure of the final reading of the Institute for Service Provision Index by Markit from the United States, which may reflect the stability of The breadth was at 54.8, unchanged from what it was in the preliminary reading for the past month, and widening at 50.0 in July.

Up to uncovering the index reading of the Service Provisioning Institute, whose importance lies in the fact that the service sector represents more than two-thirds of the GDP of the United States, which may explain the contraction of the expansion to a value of 57.0 compared to 58.1 in July, and it is mentioned that the US economy reversed worse in the second quarter. His performance since the Great Depression in the 1930s due to the Corona pandemic and recently reflects signs of recovery and that the worst is over.

Technical analysis

The EUR / USD pair stabilized trading below 1.1860, causing the price to fall under more negative pressure, which we expect to head towards testing the main ascending channel around 1.1765 before attempting to return to resume the main bullish trend again.

Therefore, the bearish tendency will be likely for today, with the necessity to monitor the price behavior upon reaching the target level, as its steadfastness in front of the negative pressure will lead the price to retrace to the upside and resume the main bullish wave and achieve positive targets starting at 1.2005, while breaking it will exit the price from the ascending channel and push for more action. From the bearish correction in the intraday and short term.

On the other hand, we should note that breaching 1.1860 then 1.1916 will stop the current negative pressure and push the price to resume the rise without the need to visit the upside channel support.

The expected trading range for today is between 1.1760 support and 1.1890 resistance.

The expected general trend for today: Temporarily bearish.