EURUSD analysis 16.09.2020

The single currency, the euro, fluctuated in a narrow, upward range, during the Asian session, to witness its rebound to the fifth session in six sessions from the lowest since August 12 against the US dollar before the developments and economic data expected on Wednesday by the economies of the euro area and the US economy, which include the actions of the meeting The FOMC and ahead of the press conference of Fed Governor Jerome Powell.

At 06:20 AM GMT, the euro pair rose against the US dollar by 0.03% to 1.1851 levels, compared to opening levels at 1.1847, after the pair achieved its highest level during the session's trading at 1.18952, while the lowest level was at 1.1829.

The markets are looking forward to the region’s economies for the release of the seasonally adjusted reading of the trade balance index, which may reflect the widening of the surplus to a value of 19.3 billion euros compared to 17.1 billion euros last June. The seasonally unadjusted reading of the same index may also indicate the expansion of the surplus to a value of 21.3. 1 billion euros, compared to 21.2 billion euros in June.

On the other hand, investors are currently awaiting the US economy, the largest economy in the world, to reveal a reading of retail sales, which represents about half of consumer spending, which accounts for more than two-thirds of the US GDP, and which may reflect a slowdown in growth to 1.1% compared to 7.5% in July. In July, the core reading of the retail sales index may also show growth slowing to 1.0% from 1.9% in July.

This comes before the largest industrial country in the world witnesses the disclosure of industrial sector data with the release of the final reading of the wholesale inventories index, which may show a 0.2% rise compared to a 1.1% decline last June, coinciding with the disclosure of housing market data with the release of The housing index reading by the National Association of Home Builders may reflect stability at a value of 78 this September.

This coincides with the proceedings of the Federal Open Market Committee meeting September 15-16 via satellite in Washington, during which it is expected that the short-term reference rates for the fifth meeting in a row will be kept between zero and 0.25%, and the expectations of the members of the committee are revealed. Federal Reserve rates of growth, inflation and unemployment in addition to the future of interest rates for the next three years.

Later today, markets are looking forward to the activities of the upcoming press conference of Federal Reserve Governor Jerome Powell, which he will hold half an hour after the end of the meeting to comment on the decisions of the committee that recently adopted several stimulus programs to support the economy in the face of the repercussions of the Corona pandemic, and it is mentioned that Powell recently announced the adoption of Fed to new inflation policy and average targeting of 2% inflation for some time.

Technical analysis

The euro versus dollar ended trading yesterday without supporting the main ascending channel, which provides signs of the price's direction to conduct a downward correction during the upcoming period, but it finds a good support floor at 1.1840 trying to protect the price from incurring more losses, as the stochastic indicator shows positive signs that may It contributes to pushing the price back to the rising channel again.

Therefore, we prefer to remain neutral until we get a clearer signal for the next direction, noting that the breach of 1.1840 will confirm the continuation of the decline and head towards 1.1720 as an initial corrective target, while the breach of 1.1885 represents the key to returning to the main bullish path and visiting the 1.2011 level as a first positive target.

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

The expected trend for today: depends on the levels mentioned in the report.