EUR/USD: Watching out for French vote – OCBC
|Euro (EUR) saw a modest rebound overnight, following the larger pullback seen the session before. EUR/USD was last at 1.1655, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Political noises may have short term bearish implication on EUR
"Apart from the moves in US Dollar (USD), the focus is squarely on French politics in the near term. Prediction market is looking for 97% chance that the confidence vote on 8 Sep fails and PM Bayrou will be out as French PM by 31 December."
"Recall last year, a no-confidence vote gamble (although not on budget) saw the exit of former PM Barnier. The risk of a French government fallout and without a leader for weeks or even months should not be ruled out. To add, Dutch holds General Elections on 29 October."
"These political noises may have short term bearish implication on EUR. Nevertheless, broader fundamentals should still support EUR, on a buy on dips. Daily momentum and RSI indicators are showing a clear bias. 2-way trades still likely. Resistance here at 1.1655/65 levels (21, 50 DMAs), 1.1750, 1.1830 levels (2025 high). Support at 1.1620, 1.1570 (23.6% fibo retracement of Mar low to Jul high)."
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.