EUR/USD: the price is sticking to a technical pivot point

The euro remained stuck on the highly technical threshold of $1.1745/$1.1750, below which the configuration had deteriorated as of 21 September. Now, the very short-term swings in the leading currency pair reflect traders' perplexity at the brutal and confusing recovery of a US president just out of his hospital bed. After ordering the Republican camp to freeze budget negotiations with the Democrats in Congress, Trump has given up a bit of ballast.

After provoking a slide on Wall Street earlier in the week by claiming to put an end to negotiations in Parliament on a new recovery plan, calling the leader of the Democratic camp Nancy Pelosi "crazy", the president has indeed somewhat influenced his speech in a series of tweets published later, saying he was ready to now sign targeted measures (household support vouchers, package dedicated to sectors such as aerospace or small businesses).

The Fed's traditional "Minutes" (minutes of the last monetary policy meeting) are also clear on the subject: "Fiscal policy measures, as well as monetary policy support and the Federal Reserve's liquidity and lending facilities, should continue to support the recovery in the second half of the year, although the recovery is far from being complete by the end of the year. The FOMC members' forecast assumed that additional fiscal policy support would be enacted this year; without this additional policy action, the pace of economic recovery would likely be slower".

Right now, the pair is trading at around $1.1774.

MEDIUM TERM FORECAST
In view of the key chart factors we have mentioned, our opinion is neutral in the medium term on the EUR/USD's exchange rate. Forex traders will prefer to stay away from the pair for the time being.

We will maintain this neutral view as long as eurodollar remains positioned between support at $1.1745 and the resistance at $1.1900.