EUR/USD's rally found territory on the 1.09 handle but has dropped back to 1.0880, albeit still up 1.44% in thin trade in early Asia. The question now is whether this is a profit taking area or if Tokyo and fuller European/London trade will stay with the bid or not and how long it will take until markets focus back on the French and European economy in a negative light again vs the US growth rate and Central Bank divergences.
The euro is strong due to a relief rally that the two favoured candidates were indeed just that. However, Le Pen could be a threat to the euro in the longer run and we are yet to see the full market's reaction or the official results that will be released mid-week on Wednesday.
The far-right leader, Marine Le Pen, and the centrist Emmanuel Macron have won the first round of voting. Macron has moved into first place at 23.11 vs Le Pen's 23.08% after 33.2 mli votes had been counted.
- Macron 23.11%
- Le Pen 23.08%
- Fillon 19.7%
- Melenchon 17.9%
Why is Euro higher on early Le Pen lead?
EUR/USD levels
EUR/USD is bid while above the key 1.0830 support with eyes on closes above 1.0880 and the 200-d smoothed sma at 1.0879. 1.0950 is a key resistance area as being the early Aug 2016 lows and mid-October 2016 levels as well. To the downside, a close of the gap and a break of the 200 ma at 1.0770 on the daily sticks guard the psuchlogical1.0550; ahead of 1.0400 and then, the 2017 low at 1.0335/40 on the wide.
The French unemployment problem
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