EUR/USD: the extent of consolidation is almost completely defined

The eurodollar, one of the benchmark barometers of risk appetite in the eyes of money managers, continued to consolidate in an atmosphere of great caution, in the light of heightened fears of a return of the virus, even though the first wave is still far from being under control, particularly in Brazil and the U.S.

Friday's main meeting, the European Council meeting on the occasion of an "orientation debate" on the Commission's draft recovery plan in particular, was the main event of the day and did not give rise to any significant progress. The ECB head Lagarde nevertheless urged the member states to hurry up and agree on a recovery plan, stressing that the relative calm on the financial markets was linked to the anticipation of strong decisions. Germany, a EUR heavyweight, appears ready to commit itself under the decisive impetus of President Merkel, but it is above all the four frugals that will have to be circumvented or convinced...

On a purely statistical level, there is nothing to get one's teeth into on Friday, a session that culminated in a speech by Fed Chairman Powell and the President of the Federal Reserve Bank of Cleveland, Lorette Mester, focusing on the conjugation and resilience of the US labour force during the virus situation.

Published on last week, the new weekly unemployment benefit registrations for the past week (24), missed expectations by staying above 1,450,000. The Philly Fed Manufacturing Index, on the other hand, surprised very pleasantly by rising sharply to 27.6, up from -42.9 last month. Lastly, the Conference Board Leading Indicators index came out above expectations at +2.9%, compared to -5.9% last month.

Newswise: the Euro-Zone Consumer Confidence Index today at 16:00 and the Old Home Sales in the U.S., also at 16:00. And tomorrow, a battery of activity indicators (PMI), for services and industry, in the main economies of Europe, in very first estimates for this month of June.

At midday today, the EUR/USD was trading at $1.1241.

MEDIUM-TERM FORECAST

In view of the above, our opinion is neutral in the medium term on the eurodollar's exchange rate.

We will maintain this neutral view as long as the EUR/USD is positioned between support at 1.1109 USD and resistance at 1.1439 USD.