EURUSD analysis 08.09.2020

The single currency, the euro, fluctuated in a narrow range that tends to decline during the Asian session, to witness its rebound for the sixth session in a row from its highest since the second of May 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 World and market pricing to escalating tensions between the UK and the European Union.

At exactly 06:40 am GMT, the euro pair fell against the US dollar by 0.11% to 1.1804 levels, compared to opening levels at 1.1817, after the pair achieved its lowest level during the session's trading at 1.1795, while it achieved its highest at 1.1822.

The markets are looking for France, the second largest economy in the euro area, for the release of the final reading of the change in employment in sectors other than agricultural, which may confirm a 0.6% decline during the second quarter compared to a decline of 2.5% in the first quarter last, before we also witness the release of the trade balance reading from France. For France, which may explain the narrowing of the deficit to a value of 7.0 billion euros compared to 8.0 billion euros last June.

This comes in conjunction with the disclosure by Germany, the largest economy of the euro area, of the seasonally unadjusted reading of the current account index, which may reflect a contraction of the surplus to a value of 20.3 billion euros compared to 22.4 billion euros in June. The seasonally adjusted reading of the trade balance index showed the expansion of the surplus to 14.9 billion euros compared to 14.5 billion euros, and amid expectations that the seasonally adjusted reading of exports will show slowing growth and imports accelerating growth.

Up to the disclosure by Italy, the third-largest economy in the region, of the seasonally adjusted reading of the retail sales index, which may indicate a slowdown in the pace of growth to 1.1% compared to 12.1% in June, before we witness the economies of the euro area as a whole, the disclosure of labor market data with the release of The final reading of the change in employment, which may confirm a decline of 2.8%, unchanged from the initial reading for the second quarter and compared to a decline of 0.2% in the first quarter last.

This also comes in conjunction with the disclosure of the final seasonally adjusted final reading of the GDP index for the euro area as a whole, which may confirm a contraction of 12.1%, unchanged from the previous initial reading for the second quarter and against a contraction of 0.3% in the first quarter, and the annual reading of the same index may also confirm a contraction 15.0% versus a contraction of 3.2% in the previous annual reading for the first quarter.

On the other hand, investors are waiting for the US economy to unveil the consumer credit index reading, which may reflect an increase to $ 12.9 billion compared to $ 8.9 billion last June. Otherwise, according to the latest figures issued by the World Health Organization, the number of cases has increased. Coronavirus-infected more than 27 million people and 881,464 people have died in 216 countries.

Technical analysis

The EUR / USD pair provided negative trades yesterday, to test the support of the main ascending channel, and today begins with an additional bearish tendency to try to break this support, which requires attention from upcoming trades, as the continuation of negative pressure and breaching the 1.1785 level will push the price to continue the decline and start a bearish correction to the rally that started. From the second quarter of this year, targeting 1.1720 areas initially, noting that breaking this level will extend the downside wave to reach 1.1540.

On the other hand, consolidation above current support areas and rebounding upwards to breach 1.1860 will push the price to resume the main bullish trend, whose main targets start at 1.1916 then 1.2045.

From here, we prefer to remain neutral temporarily until the price confirms its next destination by breaking 1.1785 support or breaching 1.1860 resistance.

The expected trading range for today is between 1.1720 support and 1.1900 resistance.

The expected overall trend for today: Neutral.