EURUSD analysis 17.09.2020

Euro analysis 17-09-2020

The single currency, the euro, declined during the Asian session, to witness its lowest level since August 12 against the US dollar, on the cusp of economic developments and data expected today, Thursday, by the economies of the euro area and the US economy, the largest economy in the world.

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 for Italy, the third-largest economy in the eurozone, to release the trade balance index reading, which may reflect a contraction of the surplus to a value of 5.20 billion euros compared to 6.23 billion euros last June, before the release of inflation data for the economies of the euro area with the release of the final reading. The annual consumer price index, which may confirm a 0.2% contraction, unchanged from the initial reading of last month, and compared to 0.4% growth last July. The core annual reading of the same index may also confirm 0.4% growth versus 1.2% growth.

On the other hand, investors are currently awaiting the American economy for the release of the aid claims index reading for the past week on September 12th, which may reflect a decline of 59,000 requests to 825,000, compared to 884,000 in the previous weekly reading. The continuing aid for the past week, on the fifth of this month, decreased by 385,000 requests to 13.0 million, compared to 13.385 million.

This comes in conjunction with the disclosure of housing market data, with the release of the housing starts index and the building permit index reading, and amid expectations that the building permits reading will reflect an increase to about 1.51 million permits compared to about 1.50 million permits in July, while the home reading may clarify The start-up decreased to about 1.47 million homes, compared to about 1.50 million homes in July.

This also 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 15.0 compared to 17.2 last August, and this comes hours after the end of the committee meeting. The Federal Reserve Open Market September 15-16, during which interest rates were kept between zero and 0.25%.

We would like to point out that the Federal Reserve revealed yesterday, after the meeting, the expectations of the members of the Federal Commission for growth rates, inflation and unemployment in addition to the future interest rates for the next three years, and it is reported that the Federal Reserve previously adopted several stimulus programs until the economy showed signs of recovery, on top of which is a purchase program Treasury bills at $ 80 billion a month and mortgage notes at least $ 40 a month.

In the same context, we also followed yesterday's press conference held by Federal Reserve Governor Jerome Powell, half an hour after the end of the meeting, to comment on the decisions and directions of the committee, which included expectations to stay the leader at zero levels until 2023, in which he expressed the importance of fiscal policy The stimulus package to support the economy, as it affirmed the Federal Reserve’s commitment to using all its tools to support the recovery.

Technical analysis

The EUR / USD pair confirmed the break of the 1.1840 level and pushed downwards to head towards our expected negative target at 1.1720, to activate the bearish correction scenario in the intraday term, with the need to monitor the price's behavior upon reaching the aforementioned level, as breaking it will cause further decline and pave the way for heading towards 1.1540 As a next corrective stop.

Thus, the bearish bias will be expected for today, bearing in mind that breaching 1.1840 will lead the price to start recovery attempts and restore the main bullish trend again.

The expected trading range for today is between 1.1680 support and 1.1840 resistance.

The expected general trend for today: Bearish.