EUR/USD: the current point of equilibrium is quite delicate

As with equities on both sides of the Atlantic, or crude oil, the euro continued to evolve "sideways" against the USD within narrow margins. However, the nervousness remains palpable, 15 days before the outcome of the American presidential election, with high stakes for the markets, and in the midst of a second epidemic wave, which has notably forced the governments of the main economic powers in the Eurozone to tighten restrictions on assembly and movement. In this case, the currency pair continued its equilibrium swings in close proximity to a major pivotal chart level, namely the $1.1745/$1.1750 level, which had been broken as early as 21 September with the release of selling energy.

For the time being, the lack of risk appetite is measured, statistically speaking, by the disappointment caused overnight by the publication of Chinese growth figures for the third quarter of this year. GDP grew by 5.0% compared to the third quarter of 2019, lacking much more optimistic expectations (+5.5%), according to the Chinese Bureau of Statistics. This barometer is particularly monitored because of its driving effect on the world economy. Friday, on the other hand, the publications were much more pleasant, with US retail sales for last month, which saw their momentum largely exceed expectations, at +2.0% in monthly rhythm for the broadest product base, against a consensus of +0.8%.

The NAHB index of residential property prices is to be followed in priority today at 16:00. The calendar will be relatively calm this week, and will only really become more intense on Friday with the first estimates of the PMI activity indicators, for services as well as for industry, for the current month, in the Euro Zone as well as in the United States.

As of right now, the pair is trading at $1.1759.

KEY CHART ELEMENTS
The technical charting situation of the pair is quite clear, but without any invitation to take a position. Namely, the EUR/USD is at equilibrium on a technical pivot zone ($1.1745/$1.1750) from which only a significant move away in a short period of time would give directionality. A shoulder, head and shoulder figure was broken by the base as early as 21 September, but without confirmation after the pullback of the 29th. We retain our neutral opinion in the immediate future.

MEDIUM-TERM FORECAST
In view of the key chart factors we have mentioned, our opinion is neutral in the medium term on the Euro Dollar (EUR/USD) exchange rate.

We will maintain this neutral view as long as Euro Dollar (EUR/USD) rates are positioned between support at $1.1570 and the resistance at $1.1900.