EUR/USD: the current trading environment is edgy

The light remains green on the macroeconomic resilience front on both sides of the Atlantic, and red on the virus front, particularly in the United States, but also in Europe where authorities have had to take localised containment measures in Spain and in Poland.

Wall Street has now reopened, after being closed since Thursday and featured an excellent surprise provided by the federal employment report.

Last month's NFP fully confirms the resilience of the U.S. job market. The private sector (excluding agriculture) created 4,750,000 jobs last month, largely beating forecasts. As expected, the unemployment rate started to decline, but at a faster pace than expected, from 13.4% at the end of May to 10.9% at the end of last month.

On Friday, on the European macroeconomic front, the services activity barometer in final data for last month fell back above the 50 point mark in France (50.6), supporting the increase in the Eurozone as a whole (47.9), one point above the target. Manufacturing PMIs, released earlier in the week, also came out above expectations as a reminder. All in all, the Composite index for last month peaks at 48.6 (versus 32.0 in May). IHS Markit comments: "The composite PMI index for overall activity in the euro area gained nearly 17 points last month, a monthly increase that was surpassed only by the record 17-point rise in May. This sharp rebound in the index underlines the remarkable speed with which the economic trend was reversed after the collapse of activity in the wake of the virus situation".

On the virus front, a glance at the latest US statistics is chilling. According to data compiled by the John Hopkins University, whose work is an authority on the subject, the number of new daily cases has exploded since 15 June and now regularly exceeds the 45,000 mark.

To be followed by the ISM non-manufacturing PMI index, at 4:00 pm (Central European time).

The morning's European statistical figures were mixed, with clear disappointment (German industrial orders in May, Sentix Consumer Confidence Index) and satisfaction (momentum of retail sales recovery in the Eurozone). The latter jumped by 18.0% month-on-month in May, well above expectations.

Right now, the EUR/USD is trading at around $1.1325.

KEY CHARTS
Nothing much has changed on the charts, we're still in a definite consolidation area.

MEDIUM-TERM FORECAST
In view of the key chart factors we have mentioned, our opinion is neutral in the medium term on the Eurodollar pair.

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