- EUR/USD bulls losing grip but could be about to step in again.
- French elections are bullish for the euro although the US dollar remains the obstacle.
EUR/USD bears have gritted their teeth and growled in the face of a bullish stampede, recently sending the euro onto the backfoot despite a favourable prospect in the French elections. At the time of writing, EUR/USD is trading around 1.8040, the 61.8% ratio of the prior bullish impulse. The pair has slid from a high of 1.0854 and has marked a low of 1.0838 in recent trade.
The two finalists in France’s presidential elections faced off in a live TV debate that could be crucial in persuading wavering voters – particularly on the left – four days before the decisive second-round vote.
However, despite favouritism in the polls for Macron, the euro is sliding. US yields have popped in recent trade and this has pulled the US dollar up from the floor as well. DXY, in an index that measures the greenback vs. a basket of currencies, is making its way through 100.50 at the time of writing, up from 100.34 lows today.
There are expectations of another weak fix from the People's Bank of China which would be US dollar positive on the fact and potentially give some support to the speculation.
Nevertheless, the moves are irradiating the near-term bullish prospects for the euro, from a technical standpoint:
EUR/USD technical analysis
The price has reverted back to the support area, marking a new low for the support and taking on the 61.8% ratio. However, the price has left an M-formation which would be expected to see a restest of the neckline:
Given the bullish trend, this neckline could well serve as only a temporary resistance and give way to the bulls, resulting in a bullish continuation for the session ahead.
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