EUR/USD: great uncertainty is making traders tense

The Euro, one of the benchmark markers of risk appetite in the financial markets, continued to wrap around a pivotal chart threshold at around $1.1775, below which the pattern is getting heavier, and above which some oxygen is being provided. Anxiety in the foreign exchange market persists, as measured by the degree of uncertainty about the evolution of the pandemic, the strength of the global economic recovery, the search for a vaccine for the virus and the budget negotiations in Congress, which are becoming increasingly tense as the presidential election approaches.

On Monday, Wall Street accelerated downward in the second half of the session, accelerating as the prospect of a compromise on a "stimulus" package - the budget package that households and businesses are waiting for, while Republicans and Democrats are failing to round out the angles - is slipping away. And the tighter the polls become, the more the prospect of the impossibility of an immediate verdict from the ballot boxes grows, and weighs on the morale of traders.

This cluster of uncertainties, all of which are high stakes, is playing for the neutrality of the swing of the flagship currency pair in the immediate future, a pair compressed against a pivot level.

As for statistics this week, most of the publications on Monday had already passed even before the opening of the debate on equities, with Chinese figures half-good, half-bad, rather reassuring on employment but worrying on growth. GDP grew by 5.0% compared to the third quarter of 2019, lacking much more optimistic expectations (+5.4%), according to the Chinese National Bureau of Statistics. This barometer is particularly monitored because of its driving effect on the world economy. 

As of now, the EUR/USD is trading at $1.1806.

MEDIUM-TERM FORECAST
Our opinion is neutral in the medium term.

We will maintain this neutral view as long as Euro Dollar (EUR/USD) rates are positioned between support at $1.1745 and resistance at $1.1900.