The single currency, the euro, fluctuated in a narrow range that tends to decline during the Asian session, to witness its retracement of the second session from its highest since April 23, 2018 against the US dollar on the cusp of economic developments and data expected on Friday by the economies of the euro area and the US economy, the largest economy in the world Markets are looking for US lawmakers to approve a new fiscal stimulus.
At exactly 06:33 AM GMT, the euro pair fell against the US dollar by 0.22% to 1.2241 levels compared to the opening levels at 1.2268, after the pair achieved its lowest level during the session's trading at 1.2239, while achieving its highest level at 1.2272.
The markets are currently looking forward to the largest economy in the euro area, Germany, the disclosure of inflation data, with the release of the producer price index reading, which is a preliminary indicator of inflationary pressures, which may reflect the stability of growth at 0.1% during November, while the annual reading of the same index may indicate a contraction of deflation. To 0.6%, compared to 0.7% in the previous annual reading for the month of October.
This comes before we also witness from Germany the release of the GFK consumer confidence index, which may reflect a contraction of the expansion to a value of 90.2 compared to 90.7 in November, leading to the release of the current account index reading for the economies of the euro area as a whole, which may show the surplus has shrunk to what Its value is 22.6 billion euros, compared to 25.2 billion euros last September.
Other than that, the markets are looking forward to the developments in the ongoing talks between the European Union and Britain regarding the issue of Britain's exit from the European Union, especially with the approaching deadline by the end of this year. The European Union said that an agreement may be reached between Brussels and London during the talks on Friday.
On the other hand, investors are currently awaiting the US economy’s current account reading, which may reflect the widening of the deficit to $ 190 billion compared to $ 171 billion in the second quarter, before we witness the release of the leading indicators reading, which may reflect a slowdown in growth to 0.4%. Against 12.1% in October, leading to the Fed's disclosure of the results of US banks' solvency tests.
We would like to point out that the second round of stress tests includes the results of more than 34 banks in the United States, including the banks that succeeded and failed to pass the tests in the first round, and this comes hours after the expiration of the activities of the Federal Open Market Committee meeting December 15-16 / Last Wednesday, during which interest rates were kept at the lowest ever, between zero and 0.25%.
Technical analysis
The euro against the dollar opened negative trading today after approaching the bullish channel resistance that appears on the image, heading towards making some temporary bearish correction, on its way to test the 1.2175 level before returning to rise again.
Therefore, the bearish bias will be likely for today, noting that the expected decline is temporary, awaiting the resumption of the main bullish trend, whose next target is at 1.2300, bearing in mind that a break of 1.2175 will pressure the price to make more bearish correction, whose next target reaches 1.2060 before Try to rise again.
The expected trading range for today is between 1.2160 support and 1.2320 resistance
The expected general trend for today: Temporarily bearish