EUR/USD: The pair continues to rise

The EUR, a "risky" currency par excellence, continued to move in the same direction as equities and crude oil today, significantly above $1.1100, the last major technical level to be surpassed to date. Forex traders are rallying around two unifying ideas: the hope for a quick economic recovery with the confirmation of the reopening of Europe's main economic powers, and the feeling of unwavering support from the ECB, which is also completing a new meeting of its Governing Council on Thursday.

In the immediate term, this morning, the euro was supported in its upward momentum by the final data of the PMI activity indicator in services in Europe, which rose to 30.6, and by a European unemployment rate at 7.2% of the active population. Note that these are April's figures, the second month in which the containment measures were implemented in Europe's main countries (Germany, France, Italy, Spain).

Several elements can play against the dollar: one is the seriousness of the virus situation in the United States, the most affected country in the world. According to data compiled by John Hopkin University, more than 1,750,000 cases of the virus have been reported in the United States, resulting in more than 105,500 deaths. The second is the burning of many American cities, not just Minneapolis, with very violent riots in reaction to the death of George Floyd, an Afro-American who died during an arrest.

To be followed on the other side of the Atlantic this afternoon, the Non-Manufacturing PMI (ISM) at 4:00 pm, Crude Oil Inventories at 4:30 pm and most importantly, the results of the ADP survey on U.S. employment at 2:15 pm, a foretaste of the federal report on Friday. (All times Central European!)

At midday on the forex, the EUR was trading at $1.1189.

MEDIUM-TERM FORECAST

In view of the above chart factors, our opinion remains neutral in the medium term on the Eurodollar.

We will maintain this neutral view as long as the EURUSD is positioned between support at $1.1110 and resistance at $1.1440.