EUR/USD: Another French political risk? – OCBC
|Euro (EUR) fell amid broad US Dollar (USD) strength, as US core goods CPI rose. EUR was last at 1.1622, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Risks are somewhat skewed to the downside
"This is despite European data coming in firmer than expected – ZEW survey, industrial production. Bearish momentum on daily chart intact while the decline in RSI continued to slow. Risks somewhat skewed to the downside. Next support at 1.1540, 1.1490 levels (50 DMA). Resistance at 1.1670 (21 DMA), 1.1830 levels."
"French PM Bayrou outlined his first budget yesterday, proposing to freeze most public spending, scrapping 2 public holidays (Easter Monday and end of WW2 in Europe) but defence spending will increase. French budget deficit was 5.8% of GDP (almost double EU’s official limit of 3%). The proposal met with disagreement from the left-wing parties and far-right party."
"Detailed budget bill is likely to go to parliament in October and failure to convince opposition parties to support his proposal is more likely than not to see PM Bayrou face a no-confidence motion then. To recap, a similar no-confidence motion saw the exit of former PM Barnier last year. This is one risk to watch for implication on EUR."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.