It Works The information presented in this publication is provided for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation to buy, and should not be used as a basis or considered as an inducement to engage in any investment. The macro point It worksMacro pointFinally, some good news regarding the pandemic! The restrictions implemented in recent weeks seem to be bearing fruit in several countries. In Europe, the number of new Covid cases has started to decline since April 1st. The seven-day average of new infections is now around 315 per million compared to 379 at the end of March. However, the situation varies slightly within each EU member state. While Covid cases are decreasing in Italy, Belgium, France, and Poland, and are stable in Portugal, they continue to increase significantly in Spain and Germany. The rise in cases in Spain is mainly due to the easing of restrictions to attract foreign tourists. In Germany, the increase is partly due to the reluctance of several regional executives to tighten restrictions when infection numbers began to rise three weeks ago. At this stage, at the European level, the most significant restrictions are in Italy and France. Across the Channel, the economy is in the process of reopening. The latest restrictions are expected to be lifted by mid-June according to government estimates. The normalization of the situation should lead to a strong surge in consumption starting at the beginning of May, which is already partially noticeable if we look at high-frequency indicators (such as pub attendance in London). On the American side, the economy is also on an upward trajectory. Even though there are still pandemic-related risks. The spread of the UK variant (which accounts for 44% of new infections nationwide) is concerning in several states, particularly Michigan. For now, the majority of U.S. states refuse to tighten restrictions and are betting on an acceleration of vaccination to curb the spread of the new variant. According to White House recommendations, starting May 1st, vaccination should be open to all adult individuals in the United States. At the current pace, the United States will have vaccinated about 75% of its population by the end of May. As we have indicated for several weeks, the economic decoupling linked to the deployment of vaccination remains between the United States and the United Kingdom on one side and the EU on the other. Technical point In the foreign exchange market, the EUR/USD ended the week in positive territory but, in the short term, uncertainty remains regarding the pair's trajectory. Only exceeding the resistance at 1.2103 could allow a new upward momentum. For now, the EUR/USD remains stuck in a wide fluctuation band between 1.1760 (which serves as support) and 1.2103. The main market mover of the week likely to significantly impact prices will be the European Central Bank (ECB) meeting this Thursday. We note that the EUR/GBP pair was almost unchanged on a weekly basis. The announcement of the surprise resignation of the Bank of England's chief economist, Andy Haldane, had no impact on the pair. Haldane was one of the most publicized figures of the central bank, with a prominent voice within the monetary policy committee setting monetary policy across the Atlantic. However, his unorthodox economic positions in recent months have aroused skepticism among observers. He was the only one predicting a V-shaped recovery for the British economy after the first lockdown, which did not occur.The supports and resistances shown below indicate the respective lows and highs within which prices should evolve during the week.SUPPORTSWEEKLYRESISTANCESWEEKLYS2S1R1R2EUR/USD1.16601.17601.21031.2234EUR/GBP0.83360.85380.87640.8844EUR/CHF1.08261.09281.11321.1234EUR/CAD1.46041.47571.51881.5480EUR/JPY127.27128.03131.37132.48For personalized advice on trends and currency hedging, contact our trading room: Announcements to follow This week will be busy with indicators, including UK employment figures for March and the latest estimate of the German manufacturing PMI for April. Traders will also closely monitor the two scheduled central bank meetings. The Bank of Canada's meeting on Wednesday is expected to keep its main interest rate at the same level. However, we expect the central bank to reduce its asset purchases by CAD 1 billion per week to CAD 3 billion. The ECB meeting will be the most notable event for the currency market. Although no change in monetary policy is expected, the ECB could face pressure for not upholding its commitment to increase asset purchase pace. We are likely to see a resurgence of volatility on the EUR pairs on Thursday afternoon. Thus, it is advisable to opt for appropriate currency hedging.Below are the publications and events expected to have a major impact on currency exchange rate movements.DAYTIMECOUNTRYINDICATORWHAT TO EXPECT?20/0408:00Change in unemployment claims (March)Previous figure at 86.6K.21/0416:00Central bank meetingThe central bank could provide more details on liquidity support measures expected to cease starting next month.22/0413:45Central bank meetingDespite its commitments, the central bank has not increased its asset purchases in recent weeks, raising questions from the market.23/0409:30Manufacturing PMI (April)Decrease to 60.8 from 66.6 previously.16:00New home sales (March)Consensus at 910K compared to 775K previously. Confirmation of a boom in the US housing market.Did you enjoy this content? Share it!