EUR/USD: the pair struggles to climb due to the Eurogroup's failed agreement

The trend is becoming increasingly uncertain for the eurodollar, which rose sharply on Tuesday, gaining over 145 pips to a high of 1.0931, before correcting to a low of 1.0829 on Wednesday.

Part of the EUR's rise was linked to optimism that the progress of the virus situation is slowing in the EU, but this optimism has given way to the reality that the pandemic is still far from over.

Moreover, the precise economic consequences of the virus are still very uncertain, and are likely to be worse than the market currently expects.

It is worth noting that on Tuesday the finance ministers of the euro area failed to reach an agreement to support the European economy, which directly undermines confidence in the single currency, although discussions will continue.

From a technical point of view, it is worth noting that OCBC bank points out that "bids around 1.0919 have kept the eurodollar in check".

"Much depends on how long the feeling of risk lasts in the future. We choose not to pursue the pair higher for the time being".

"1.0919 is still the short-term upward target", OCBC says.

As for UOB bank, it believes that "the sudden jump in the euro that took it soaring to a high of 1.0923 was a surprise. The rapid advance appears to be continuing but the euro is not expected to continue to strengthenright now. That being said, the euro may surpass the 1.0924 high but any advance is considered to be within a range of 1.0839/1.0960 (a sustained rise above 1.0949 is not expected)".

Currently, the eurodollar is trading at 1.0875 on the forex.

Hourly eurodollar pair chart