EUR/USD: Markets are sidelining ahead of a major event – OCBC

The main focus for the Euro (EUR) is on French elections in the short term. The concern is still on potential fiscal direction far-right parties may be taking and if the ‘cohabitation’ outcome comes into play, OCBC analysts Frances Cheung and Christopher Wong note.

French election weighs on the market

“Knee-jerk impact on EUR can vary but is likely to be skewed to the downside, unless outcome surprises with Macron’s Ensemble coalition winning a larger share. The other swing surprise that would be outright negative for EUR would be a >50% win for either the far right or leftist coalition (not our base case).”

“EUR was last at 1.0682. Bearish momentum on daily chart shows signs of fading while RSI rose slightly. Some risks to the upside but 2-way trades still likely ahead of French election risks.”

“Support at 1.0660/70 levels (recent low) before 1.06 levels. Resistance at 1.0770 (50 DMA), 1.0810 (38.2% fibo retracement of 2024 high to low, 100 DMA).”