EUR/USD: $1.1750 hit without any solid warning

The euro frankly fell back above a pivotal level at $1.1745/$1.1750, in the wake of a warming of the atmosphere on all risky assets, despite the threat of a challenge to the outcome of the U.S. presidential election. Biden is now only a few states away from obtaining the 270 votes he needs, the key to the White House. The markets seem to be accommodating themselves to a probable cohabitation with the Senate.

Aurez BCG says: "If the Senate remains in Republican hands, the possibility of a new major economic aid plan is reduced, lowering the risk of inflation and therefore interest rates. The Fed, anxious to support the growth of economic activity if political leaders do not reach a compromise on budgetary measures, could adopt new measures to provide liquidity to the markets".

John Plassard (Mirabaud) adds: "The Fed could decide, to everyone's surprise, to act before next month to try to neutralise the economic damage caused by the virus situation"; all the more so as parliamentary discussions on the stimulus package are frozen.

In terms of this week's statistics, the final data of the PMI services activity indicator for the Euro Zone last month came out significantly below the first estimates, at 51.5, while remaining above the 50 point mark which separates, as a reminder, by construction, a contraction from an expansion of the activity sector concerned. On the other hand, the producer price index did not deviate from the consensus by one iota. Across the Atlantic, the survey by the private human resources firm ADP revealed job creations in the private sector (excluding agriculture) well below expectations for last month. Verdict today with the federal NFP report on employment. Nothing worth mentioning in the US trade balance deficit for September, almost in line with the expectations of the analysts and economists surveyed. Finally, the PMI Services activity indicator (ISM) expected at 57.5 in final data for last month finally came out at 56.7.

As of right now, the EUR/USD pair is trading at $1.1734.

KEY CHARTS
The central threshold of $1.1745/$1.1750, which has prevailed since mid-summer, was regained yesterday, quite frankly, after the high volatility recorded since Tuesday. The EUR/USD currency pair has regained a working base between $1.1745 and $1.19, although no new direction is being asserted. Traders are advised not to trade the currency pair in the immediate future as there is no relevant charting and technical entry point.

MEDIUM TERM FORECAST
In view of the key chart factors we have mentioned, our opinion remains neutral in the medium term on the EUR/USD exchange rate.

We will maintain this neutral view as long as EUR/USD remains positioned between support at $1.1745 and resistance at $1.1900.